The following Banking & Finance guidance note Produced in partnership with King & Wood Mallesons provides comprehensive and up to date legal information covering:
A market flex provision is designed to give arrangers and underwriters some flexibility as to the terms of a financing following the signing of the relevant facility agreement. This is usually with the intention of helping them achieve a successful syndication. The wording typically provides that the arrangers or underwriters may change certain key terms of the financing in order to make it more attractive to potential lenders. Market flex is usually dealt with in the mandate letter or the arrangement fee letter.
For more information on mandate letters, see Practice Note: Mandate letters.
For more on the role of arrangers in loan transactions, see Practice Note: The finance parties.
Market flex provisions can be used by the arrangers or underwriters before or after the facility documentation is signed.
The Loan Market Association (LMA) standard wording (The LMA wording set out below) contemplates a change to the 'pricing, terms and/or structure' of the financing, with an option to stipulate that the overall facility amount must not change. However, the scope of a market flex provision can be heavily negotiated and the final position will vary from deal to deal.
Some flex clauses allow a wide range of changes to the terms of the
**excludes LexisPSL Practice Compliance, Practice Management and Risk and Compliance. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
Take a free trial
0330 161 1234