Waiver and consent requests
Waiver and consent requests

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

  • Waiver and consent requests
  • Types of waiver requests
  • Serious defaults
  • Other defaults
  • Types of consent requests
  • Deciding whether to comply with the request
  • Conditions to grant
  • Documenting waivers and consents
  • Dangers of deemed waivers or consents

Waiver and consent requests

During the term of a facility, a borrower's circumstances can change.

Sometimes, a borrower's circumstances change to such an extent that it wants the terms of the facility documentation to be formally altered to reflect the change. For example, a borrower might ask its lender to relax the financial covenants binding on the borrower if its financial condition has significantly improved and looks set to be sustained. Conversely, if the borrower isn't performing well financially, it might ask its lender to reschedule the debt to make the repayment dates achievable. Those types of amendments are permanent and are dealt with in Practice Note: Amending a facility agreement.

This Practice Note deals with situations where the borrower's circumstances have changed in a more temporary way. For example, it might have had a bad quarter, causing it to be in breach of a financial covenant or it might have had problems preparing its financial statements which means that it is unable to deliver them until after the deadline in the facility agreement. In these circumstances, the borrower will not need a long-term amendment to the facility documentation. Instead, it will need a short-term waiver from the lender to avoid it being in default.

Borrowers can sometimes also need consents from their lenders. In practical terms, the process for obtaining waivers and consents is likely to

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