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Representations, Undertakings and Events of Default

  • Sue Wright
Part of the Global Financial Markets book series (GFM)

Abstract

The loan agreement contains representations which are required to be made on the date of the agreement. It also often contains representations which are required to be made on other dates (typically, on each drawing and on the first day of each Interest Period). The purpose of the representations is:
  • in the case of representations required to be made on the date of the agreement, to trigger disclosure of information; and

  • in all cases, to give the lenders the contractual right not to advance additional monies (i.e. to act as a drawstop) and/or to accelerate the loan if the specified statements are untrue on the date they are made.

There may also be liability in misrepresentation (as opposed to liability in contract) for the borrower if the statement is untrue.

Keywords

Financial Covenant Insolvency Proceeding Grace Period Diffi Culties Financial Indebtedness 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Sue Wright 2014

Authors and Affiliations

  • Sue Wright

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