Acquisition finance—representations, covenants and events of default
Acquisition finance—representations, covenants and events of default

The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:

  • Acquisition finance—representations, covenants and events of default
  • Impact of Brexit and LIBOR transition
  • Representations
  • Information undertakings
  • Financial covenants
  • General undertakings
  • Undertakings—permissions, exceptions and baskets
  • Documentary relaxation clauses
  • Events of default

This Practice Note discusses:

  1. the purpose of and typical representations in a leveraged senior facilities agreement (SFA) and how these differ from those in an investment grade facility agreement

  2. common ways for the sponsor to attempt to limit the scope of the representations

  3. when representations are typically given

  4. purpose of and typical information undertakings in a leveraged SFA

  5. purpose of and typical general undertakings in a leveraged SFA

  6. the use of 'baskets' to limit the impact of the general undertakings

  7. purpose of and typical events of default

The information in this Practice Note assumes an SFA in a similar form to the senior multicurrency term and revolving facilities agreement for use on leveraged acquisition finance transactions available to members on the LMA website (LMA Leveraged SFA). For information on other aspects of a leveraged finance facilities agreement, see Practice Note: Acquisition finance—facilities agreement

For more information on the terms used in this Practice Note, see: Glossary of acquisition finance terms and jargon.

This Practice Note provides introductory information only. Each section links through to any relevant further information.

This Practice Note does not cover high-yield documentation. For information on high-yield, see Practice Notes: An introduction to high-yield bonds and High-yield covenants and other key terms in the European high-yield market.

For further introductory information on acquisition finance transactions, see Practice Notes: Acquisition finance—introductory guide, Sources