Conditions precedent on acquisition finance transactions—document table

Published by a LexisNexis Banking & Finance expert
Practice notes

Conditions precedent on acquisition finance transactions—document table

Published by a LexisNexis Banking & Finance expert

Practice notes
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The table below summarises the conditions precedent typically requested by senior lenders on an acquisition finance transaction, together with the party responsible for drafting/providing them and other relevant information.

There will normally be a large number of conditions precedent documents including:

  1. corporate authorisations

  2. acquisition documents

  3. equity investment documents

  4. finance documents (including facilities agreements and security documents)

  5. legal opinions

  6. due diligence reports and other information, and

  7. documents relating to the structure and flow of funds

The conditions precedent will be contained in a schedule to the facilities agreement.

Some conditions precedent will need to be delivered prior to signing and some prior to first utilisation (see Conditions precedent on acquisition finance transactions—general considerations).

It is important to consider what additional conditions precedent are appropriate for the particular transaction, considering such factors as the due diligence reports, particular legal considerations and the transaction’s particular structure. Lists contained in precedent or standard form documents should be used as starting points only.

For an introductory guide to acquisition finance,

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United Kingdom
Key definition:
Conditions precedent definition
What does Conditions precedent mean?

In leveraged finance transactions, conditions precedent are commonly split into conditions precedent to signing and conditions precedent to closing. Conditions precedent to signing are conditions that must be satisfied by the borrower before the facility agreement can take effect. Conditions precedent to closing are conditions which must be satisfied by the borrower before it is entitled to draw down funds under the facilities agreement.

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