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GLOSSARY

Yank the bank definition

What does Yank the bank mean?

Term in finance documents allowing the company to require any dissenting lender to transfer their rights to a new lender of choice, usually in return for being paid at par plus interest and break costs.

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Blocking majorities

It is important to consider the underlying finance documents to determine the requisite majorities of creditors which can block certain actions necessary to maintain an effective standstill, and to complete a successful restructuring (see Practice Notes: Key elements of a standstill agreement).Initial stepsIncreasingly companies have many different types of creditor, each with conflicting motives.It is important to review the finance documents and any intercreditor agreements (see Practice Note: Intercreditor agreements for R&I lawyers) to determine for each tranche of debt:•what majorities are required from each creditor constituency to waive any covenant breaches/events of default (common terms in a standstill agreement) or amend the finance documents•the process for enforcement actions plus the role of any security trustee/collateral agent/facility agent•whether there are any buy-out rightsA valuation (see Practice Note: Where the value breaks and negotiating strength) will identify creditors likely to exercise blocking rights; those close to where the value breaks will maximise any blocking rights they have to secure a better deal.Majorities in syndicated loansFor loans provided by a group of...

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