Representations, Undertakings and Events of Default
Part of the
Global Financial Markets
book series (GFM)
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.
KeywordsFinancial 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.