Leveraged finance facilities agreements often provide that a percentage of the group's excess
cashflow be applied in prepayment
of the facilities. This percentage may start at 100% but often reduces in stages as the group's leverage ratio improves. Excess cashflow is typically defined in the financial covenants section of the facilities agreement and may constitute, eg the group
's cashflow for the relevant year, less debt service payments and any voluntary prepayments.
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