The Book of Jargon® – European Capital Markets and Bank Finance

Un glossaire des termes spécifiques à la finance d'entreprise et bancaire européenne, disponible en ligne.

  • ‘Adl:
    an Islamic finance term meaning justice, equity or fairness in Islamic jurisprudence.
    an Islamic finance term meaning the person performing a task as an agent, like any agent in common law jurisprudence.
    an Islamic finance term for immovable property, such as real estate.
    an Islamic finance term for a down payment paid in advance; for example, a non-refundable deposit paid by a buyer retaining a right to complete a sale.
    an Islamic finance term for a tangible (physical) asset, such as silver and gold, which would be the underlying asset in an Ijara.
    “A” Loan:
    another name for a Facility A Loan.
    an Islamic finance term meaning a promise (a unilateral or mutual promise); e.g., used in the context of purchase undertakings and sale undertakings in Ijara lease transactions to purchase the lease asset at the end of the term of the lease.
    Agreement Among Initial Purchasers.
    Accounting and Auditing Organisation for Islamic Financial Institutions. AAOIFI performs a review of developments in the Islamic finance sector and issues guidance papers.
    the Accounting and Auditing Organisation for Islamic Financial Institutions, an international and autonomous not-for-profit Organisation based in Bahrain that prepares accounting, auditing, governance, ethics and Shari'ah standards for Islamic financial institutions. Also, in Capital Markets it is an acronym for Agreement Among Underwriters
    Asset-Based Loan.
    Accelerated Bookbuild Offering.
    Asset-Backed Security.
    Absolute Priority Rule:
    a term primarily used in US Bankruptcy law. This rule states that when a company is liquidated or reorganised, senior classes of claims and Equity interests must receive full distributions on account of their claims or Equity interests before junior classes may receive any distributions, unless the senior classes consent otherwise.
    Accelerated Bookbuild Offering:
    an offering on the Equity Capital Markets that involves the offering of shares in a short span of time, usually in one or two days, with minimal or no marketing.
    the end of the line in Bond and loan world. Following an Event of Default, the Bondholders (in accordance with the Terms and Conditions or the Indenture) or Lenders (in accordance with the terms of a Facility Agreement) have the right to, among other things, “accelerate” the Due Date of their debts; in other words, they have the right to declare their Bonds or loans immediately due and payable. Note that the practice in the US and Canada (and in European Indentures or Terms and Conditions) is for Insolvency Event of Default to lead automatically to Acceleration, although this is uncommon in European bank financings, which typically require a direction to the agent by Lenders holding two-thirds or more of the outstanding debt.  Note that Acceleration can lead to an obligation on the officers of the Issuer/Borrower to file for Insolvency, thereby precluding the ability to agree to a consensual out-of-court restructuring. See also Place on Demand.
    Accordion Feature:
    an Incremental Facility that allows the Borrower to increase the maximum commitment amount under a Revolver or to incur additional Term Loan debt under the Facility Agreement. Contrast with Side-Car.
    Accordo di Ristrutturazione:
    a pre-Insolvency procedure for company restructuring in Italy. Filing brings about a stay on creditor action for 60 days, and the company can obtain an immediate stay preceding the agreement in certain circumstances. Must be supported by an Esperto’s report and entered into with at least 60% of the company’s creditors by value and can be ratified by the bankruptcy court. Unlike the Concordato Preventivo, this procedure is only effective as between the company and participating creditors.
    can mean many different things but, in Capital Markets, a shorthand reference to the potential buyers of Securities in an offering.
    Accredited Investor:
    defined under SEC Rule 501 of Regulation D, this refers to people and entities that are permitted to buy Securities in a Private Placement. The term covers virtually all types of institutions that are participants in the private placement market, and also includes people who are either rich or sophisticated. It is, of course, better to be both rich and sophisticated, but one will do for Regulation D purposes.
    Accreted Value:
    the original purchase price of a Zero Coupon Bond or Discount Note plus all non-cash Interest that has accrued on the Bond or Note since the date of issuance. The calculation of Accreted Value is set out in the Terms and Conditions or the Indenture.
    Accrued Interest:
    Interest that has become earned but has not yet become due and payable (or which has become due but has not been paid) by the Issuer/Borrower.
    Acquisition Facility:
    a Delayed Draw Term Facility intended to be used to fund acquisitions. Often combined with a Capex Facility.
    Acquisition Proceeds Prepayment:
    a specific type of Mandatory Prepayment. This provision in Facility Agreement requires the loans to be prepaid with the net cash proceeds of claims under the SPA and against the providers of Due Diligence reports. This prepayment requirement is often subject to a Reinvestment Right.
    Acting in Concert:
    European jurisdictions take into account the fact that a publicly listed company may be controlled by several minority shareholders who are Acting in Concert rather than one sole majority shareholder. The details of this concept vary from jurisdiction to jurisdiction but, for example, in the UK the City Code defines persons Acting in Concert as those persons who, pursuant to an agreement or understanding (whether formal or informal), co-operate to obtain or consolidate control of the Target or to frustrate the successful outcome of an offer for the Target (see Concert Party). Other countries will use the term differently.
    the French term for “update”. Once a reference document or a registration document has been filed with the AMF, the Issuer can (and sometimes must) update certain information provided therein.
    Acuerdo Bilateral de Refinanciación del 71. bis:
    bilateral refinancing agreement which is excluded from the scope of Spanish Clawback actions via the Refinanciación Protegida safe haven under the Spanish Ley Concursal provided certain conditions are met, including, amongst others: (i) the agreement increases the previous proportion of assets versus liabilities (e.g., payments in kind), (ii) the quantum of resulting current assets is higher than the quantum of current liabilities, (iii) the value of the Security Interest granted in favour of the creditors, added to the value of the existing Security Interest, does not exceed 9/10 of the outstanding creditor debt, (iv) the Interest Rate applicable to the post-restructuring debt does not exceed the original interest rate by more than 1/3, and (v) the agreement shall be executed in a Spanish public document.
    Acuerdo Colectivo de Refinanciación del 71:
    bis: a collective refinancing agreement which is excluded from the scope of Spanish Clawback actions via the Refinanciación Protegida safe haven under the Spanish Ley Concursal provided certain conditions are met, including, inter alia, approval by creditors holding at least 3/5ths by value of the debts, and the issuance of a certificate by the debtor’s auditor acknowledging that the stated majority has been reached.
    Acuerdo de Homologación:
    also sometimes called the ‘Spanish scheme of arrangement’, it is a refinancing agreement which is excluded from the scope of Spanish Clawback actions via the Refinanciación Protegida: safe haven under the Spanish Ley Concursal provided certain conditions are met, including: (i) the agreement significantly increases the funds available to the debtor and/or extends the maturity and/or substitutes the debtor’s obligations thereto, but only to the extent that the agreement forms part of the viability plan which allows for the continuity of the business activities of the debtor in the short and medium term, (ii) it is approved by creditors representing 51% of the debtor’s total financial liabilities (excluding trade creditors) and debtor’s auditor must issue a certificate acknowledging that the stated majority has been reached, and (iii) it is homologated (confirmed) by the relevant mercantile court. In addition, some of the effects of an Acuerdo de Homologación can be imposed to non-participating or dissenting financial creditors to the extent that certain higher majorities are reached.
    Additional Amounts:
    like a Tax Gross-Up in a Facility Agreement, a provision in an Indenture that increases the amount of any payment with respect to the Notes by the Issuer to a holder of the Notes so that, after payment of applicable Withholding Taxes, the holder receives what it would have received if no withholding taxes had been imposed.
    the Abu Dhabi Global Market, a financial Free Zone in Abu Dhabi focusing on the following sectors of financial activity: banking and brokerage, capital markets, wealth management, reinsurance and captive insurance, Islamic finance and ancillary services. The ADGM has its own body of law, including corporate law, contracts law and employment law, its own financial services regulator, and its own court system.
    Adjusted EBITDA:
    EBITDA on steroids. Refers to EBITDA, adjusted to eliminate the impact of certain unusual or non-cash items that the Issuer/Borrower (or its Sponsor) believes are not indicative of the future performance of its business. Adjusted EBITDA is also a component of the Leverage Ratio and Fixed Charge Coverage Ratio definitions. See also Pro Forma Adjusted EBITDA.
    Administrador Concursal:
    person appointed by a Spanish Insolvency court either to supervise or manage an insolvent company. Generally, this is a single administrator, who must be registered with the public Insolvency registry (Registro Público Concursal) and must have stated the geographic region in which they practice.
    a formal Insolvency process in England designed to facilitate the rescue of an insolvent company or achieve a better return to creditors than if the company immediately went into liquidation. It involves the control of the company passing from the directors to an Administrator and a Moratorium on most secured claims and unsecured claims. The procedure has gained notoriety through the use of Pre-packs.
    a licensed UK Insolvency practitioner (usually an accountant) who is appointed by the court, the company’s directors or by certain qualifying Secured Parties for the purposes of an  Administration.
    Admission and Disclosure Standards:
    the rules, published by the London Stock Exchange, containing the admission requirements and the ongoing disclosure requirements which companies with Securities admitted to trading on the markets of the London Stock Exchange have to observe. The rules do not apply to companies admitted to AIM.
    Admission aux Négociations:
    French term for listing.
    Alternative Dispute Resolution and also American Depositary Receipt.
    the Abu Dhabi Securities Exchange.
    defined slightly differently in different types of agreements and jurisdictions, but generally refers to a subsidiary, corporation, partnership, or other person controlling, controlled by or under common control with another entity. The official SEC definition is found in SEC Rule 144 and Rule 405.
    Affiliate Transactions Covenant:
    a Negative Covenant that protects against disguised dividends by preventing the Issuer/Borrower from entering into non-arm’s-length transactions with its Affiliates, such as paying excessive management fees to deal Sponsors, selling assets to equityholders for less than fair market value or overpaying equityholders/employees through excessive salaries. In Bond world, the Affiliate Transactions Covenant typically does not flatly prohibit Affiliate transactions, but rather requires that they be on arm’s-length terms and, at certain value thresholds, be approved by disinterested directors. Fairness Opinions are also sometimes required.
    Affirmative Covenant:
    another name for a Positive Covenant.
    Association for Financial Markets in Europe. A trade body that represents the shared interests of a broad range of global and European participants in the wholesale financial market (their words not ours). Various affiliates have been integrated, including the European High Yield Association.
    AFME’s Agreement among Initial Purchasers:
    the form Agreement among Initial Purchasers drafted by the AFME that is used in most, if not all, High Yield Bond offerings in Europe.
    Agency Fee:
    another name for the Facility Agent Fee.
    a generic term that is usually used to describe the Facility Agent, but may also be a referencve to any of the following:   Security Agent, Documentation Agent, Syndication Agent, Paying Agent, Transfer Agent or Registrar.
    Agreed Security Principles:
    used most frequently in loan world, these are typically contained in a schedule to the Facility Agreement and provide the negotiated framework for which Collateral and Guarantees are required to be given in respect of the relevant transaction. Agreed Security Principles will contain a description of the limitations on granting Guarantees and Collateral, guidelines with respect to how will be taken and Perfected, and what obligations the Collateral giver will be under in the relevant Security Agreement.
    Agreement among Initial Purchasers / Managers / Underwriters:
    the agreement that governs the relationship among the Initial PurchasersManagers or Underwriters. Usually one of AFME's Agreement among Initial Purchasers, AFME's EMEA ECM model agreement among underwriters or ICMA's form agreement among managers is used for this agreement, depending on the context.  There is no directly comparable document among the members of a bank loan Syndicate, mostly as a matter of custom. See, however, Syndication Agreement.
    AHYDO Rules:
    rules under the US Internal Revenue Code that limit a company’s ability to deduct Interest on certain high-yield instruments issued with OID. AHYDO (Applicable High Yield Discount Obligations) Rules are particularly important in hot markets when Bonds with a PIK feature are being sold. Normally, a company can deduct Interest from its calculation of taxable income, whether the Interest is paid in cash or in kind. However, if the AHYDO Rules apply, a company cannot deduct Interest from its calculation of taxable income until it pays the Interest in cash (and the company may be prohibited from deducting a portion of the Interest permanently).
    originally known as the Alternative Investment Market and abbreviated as AIM, the market is operated by the London Stock Exchange. It provides a more flexible regulatory environment than the Main Market of the London Stock Exchange. AIM does not require a particular financial track record or trading history, an established management team or any minimum market capitalisation, nor does it require minimum thresholds regarding size or number of shareholders, and so it enables smaller and growing companies to access the public market.
    AIM Rules:
    the AIM Rules for Companies as published by the London Stock Exchange.
    Actos Jurídicos Documentados, the Spanish version of Stamp Duty.
    KFC, but in the Western Province of Saudi Arabia only.  If you are looking up Islamic finance terms, you might be somewhere, or about to go somewhere, where this knowledge comes in useful.
    All In Cost:
    the total cost to a Borrower of obtaining the Facilities, including fees, OID, Interest, Floor and other charges.
    All or Substantially All:
    no one knows exactly what this phrase means. This phrase is used in various Covenants and other contractual provisions, but the precise meaning is the subject of much debate (and litigation). It does not necessarily mean what it sounds like in general layman’s terms. If you think you have an “all or substantially all” question, call a Latham lawyer.
    when used in Capital Markets world, this is the amount of a new issue of Securities allotted to each Syndicate member by the Lead Manager after the final terms of the issue have been fixed. Following Allotment, the Syndicate members will sell the Securities allotted to them to their investor clients.
    Alternative Dispute Resolution:
    any process of dispute resolution out of court (and, in some uses of the term, also out of arbitration). Often preferred or required in addition to or in place of standard enforcement and jurisdiction provisions in certain emerging markets.
    Alternative Transactions Language:
    a provision in the Fee Letter that says that the investment bank that has committed to one or more Facilities will still get paid all or some of its agreed fees if the Borrower ends up funding the applicable facilities through a different bank. Sometimes this is negotiated down to either giving the original bank a right to play in any new deal (but not a guarantee of payment), or giving the original bank an amount of fees equal to what the alternative bank gets. Also referred to as a Deal-Away Fee / Deal-Away Protection.
    an Islamic finance term for a trust, such as a bank account deposit.
    an Islamic finance term for a custodian or guardian, similar to a custodian or guardianship in common law jurisprudence.
    Amend and Extend:
    entering into an amendment with the main intention of extending the Maturity Date under a Facility. This technique is generally employed by Borrowers when difficult lending conditions mean that a Refinancing is either unavailable or prohibitively expensive. Lenders in such arrangements often require additional amendments as part of the extension, including an increase in the Interest Rates to reflect current market rates.
    Amend and Pretend:
    slang for entering into an amendment or Waiver of Defaults rather than fixing more fundamental problems with a Capital Structure. The amendment or Waiver is completed and everyone then pretends everything is OK.
    American Depositsry Receipt:
    a negotiable certificate issued by a bank or trust company and traded in the US markets that represents ownership of Securities of a non-US company. Also known as  ADRs. ADRS are denominated in US dollars, with the underlying Security held by a US financial institution overseas. ADRs are US Securities and are thus subject to US Securities regulations.
    Autorité des marchés financiers, the French financial market authority. An independent public agency, it has statutory power to issue regulations, sanction non-compliant Issuers and grant individual decisions, such as approval of Prospectuses or exemption from the obligation to launch a mandatory tender offer.
    Anti-Money Laundering. See KYC.
    the required periodic repayment in instalments of portions of the principal of a Term Loan or of Bonds prior to their final maturity. Repayment instalments will typically either be in equal instalments or feature a Balloon Payment. Facility B Loans, Facility C Loans, Revolving Facilities, Second Lien Facilities, Mezzanine Facilities and generally do not amortise and instead feature a Bullet Maturity. In accounting speak, Amortisation is the same concept as Depreciation, except that intangible assets are amortised and tangible assets are depreciated. See Depreciation.
    Amortisation Schedule:
    the schedule of regularly timed repayments of principal prior to the maturity of a Term Loan.  See also Amortisation.
    Amortising Loan:
    Term Loan that amortises, usually reference to a Facility A Loan.
    Ancillary Facility:
    Facility made available on a bi-lateral basis by a Lender using mechanics established under a Revolving Facility and which reduces that Lender’s commitments under the Revolving Facility accordingly. Established for operational ease when a Revolving Facility has been Syndicated since Ancillary Facilities are typically of a type such that they are best made available bi-laterally — examples of such facilities include overdrafts, short-term loan Facilities and foreign exchange facilities. Much more common in Europe than Swing Line Loans, which are more frequently seen in the US.
    Angel Investor:
    an investor (usually an affluent individual as opposed to a corporation) that provides capital for a business start-up, usually in exchange for Preference Shares, convertible debt or Equity ownership. Think “Dragons Den” (or "Shark Tank" for our US readership), a series of reality television programmes broadcast internationally featuring entrepreneurs pitching their business ideas in order to secure investment finance from a panel of insufferably smug Angel Investor/Venture Capitalists (the eponymous “dragons” or "sharks").
    a reference to a provision or practice which is intended to prevent acts which are or may be, among other things, designed to influence an individual in the performance of his or her duties, whether through bribery or an abuse of power. Given that a breach of the legislation may result in serious penalties for both the individual and the business, most businesses have introduced policies and compliance procedures to ensure that employees are aware of, and in compliance with, the law. Make sure to check your policy before accepting any gifts.
    Anti-Layering Covenant:
    a Covenant that prohibits an Issuer/Borrower from layering in another series of debt between the Senior Debt and the Subordinated Debt. This is essentially a no-cheating rule and in Bond world was historically only used in Senior Subordinated Note deals, although it has increasingly become common in Senior Notes and Senior Secured Notes deals to include an analogous provision that requires that all debt that subordinates itself to any other debt also subordinate itself to the senior / Senior Secured Notes, as well. In loan world, this Covenant loan world has become more common in transactions with Senior Debt and a Mezzanine Financing. The Anti-Layering Covenant ensures that the Subordinated Debt occupies the second-class slot and not the third or fourth. This clause is an important consideration when looking to add a Second Lien Facility, “sandwiched” in between the First Lien Facilities and unsecured Bonds, as they may be prohibited by the Anti-Layering Covenant.
    Anti-Money Laundering:
    see KYC.
    a certificate issued pursuant to the Hague Convention of 5 October 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents (Convention), which facilitates the circulation of public documents between state parties. It does so by replacing the cumbersome and often costly formalities of a full legalisation process with the mere issuance of a certificate called an Apostille. Instead of legalisation by the appropriate embassy, the notary’s certificate and seal are certified as genuine by the competent authority of the state on whose territory the document has been executed.  The Convention applies to public documents (such as a notarial act or a document with notarial authentication of signatures) executed in one state party to the Convention and to be used in another state party to the Convention.
    Applicable Margin:
    the additional percentage that is added to a particular borrowing index, usually a relevant IBOR, to determine the Interest Rate payable on variable rate debt.  The specified percentage is usually referred to as the Applicable Margin or the Margin.
    to take advantage of a price differential between two or more markets, such as by buying an investment in one market and then immediately selling it at a higher price in another market.
    Arrangement Fee:
    the fee paid to the Arranger for arranging and underwriting the Facilities.  Calculated as a percentage of the facilities that are being provided. Also known as an Underwriting Fee or Upfront Fee.
    Arrangement Letter:
    see Auditor Arrangement Letter.
    the bank or financial institution that “arranges” (alone or with other co-Arrangers) a Facility by negotiating original terms with the Borrower and Syndicating the facility to a larger group of Lenders. An Arranger generally has no ongoing obligations under a Facility Agreement after the Closing Date. Also used to describe the bank taking the lead on arranging an EMTN or GMTN Programme.
    Auction-Rate Security.
    Agreed Security Principles.
    Assemblea degli Obbligazionisti:
    the Bondholders’ meeting provided for by the Italian Civil Code, which resolves upon any matters affecting the interests of the holders of the notes issued by an Italian company (e.g., the amendments of the terms and conditions of the notes and the appointment of the Bondholders’ representative (Rappresentante Comune)).
    Asset Sale Covenant:
    the Covenant that governs the sale or other disposition of assets. In the Terms and Conditions or Indenture, the Covenant assures that the Issuer’s Balance Sheet stays in balance by making sure that if assets shrink, the Issuer either replaces the assets with new assets or reduces its debt. The company is allowed to sell assets under the Covenant, but it must get fair market value and mostly cash (typically 75%). The proceeds must be used to repay certain types of debt, reinvest in long-term assets useful in the business or to make an offer to repurchase Bonds at Par. In a Facility Agreement, by contrast, generally this Covenant strictly limits the Borrower's ability to sell assets, except as may be specifically negotiated on a deal-by-deal basis with limited Carveouts and Baskets. In the Facility Agreement context, see also Asset Sale Prepayment.
    Asset Sale Prepayment:
    a specific type of Mandatory Prepayment. This provision in a Facility Agreement requires the loans to be prepaid with the net cash proceeds of certain non-ordinary course asset sales of the Borrower and its subsidiaries. The idea is that loans are made partly based on the knowledge that a certain amount of asset value is held by the Borrower and pledged as Collateral. To the extent the Collateral is disposed of, the loans are prepaid with the net-cash proceeds. This prepayment requirement is often subject to a Reinvestment Right.
    Asset Stripping:
    not nearly as exciting as it sounds, this is the act of buying a business whose market value is below its asset value with the intention of selling off the most profitable assets separately to realize a profit (rather than running it). Think Richard Gere’s corporate raider character in Pretty Woman (Touchstone Pictures, 1990).
    Asset-Backed Security:
    a generic term describing Tranched, exchange-listed Bonds issued by Special Purpose Entities backed by financial assets as mundane as residential mortgages (Residential Mortgage-Backed Securities / RMBS), commercial mortgages (Commercial Mortgage-Backed Securities / CMBS), automobile loans and leases, and credit card obligations, or as esoteric as casualty insurance claims (“catastrophe or “cat bonds”), life insurance claims (“viatical settlement bonds”) or changes in survival rates (“longevity bonds”). CBOs, CDOsCFOs and CLOs are all types of Asset-Backed Securities. Asset-Backed Securities are now notorious for being one of the causes of the Credit Crunch.
    Asset-Based Loan:
    a Revolving Facility where the total amount that can be borrowed fluctuates based upon the value of the Borrowing Base at a given time. Asset-based lending is a way for companies to meet their short-term cash needs by borrowing against their short-term assets at favourable rates. Asset-Based Loans are particularly popular among retailers, oil and gas Issuers and other businesses with large amounts of accounts receivable and inventory but can be tricky (and therefore expensive) to structure in Europe given the difficulties in some jurisdictions in taking Security over the categories of assets used for the Borrowing Base. The Asset-Based Loan market in the US is therefore significantly more developed than it is in Europe.  See Borrowing Base and Borrowing Base Loan.
    a Lender's transfer of its rights and, if possible, obligations under a Facility Agreement to a new Lender. Borrowers frequently like to maintain a degree of control over the Assignment process through consent rights, Whitelists and, in rare cases, Blacklists. Lenders prefer to limit such consent rights in order to maximise Syndication options and keep the loans more freely tradable but may provide the Borrower with prior consultation rights. It would be extremely unusual for the Borrower to retain consent or consultation rights (as applicable) with respect to transfers to existing Syndicate members or to Affiliates of existing Syndicate members or when an Event of Default is continuing. Note that a Borrower’s right to consent to transfers is an important fact that helps distinguish loans from Securities. Under English law, however, whilst you can assign rights, you are not able to assign obligations (see therefore Assignment and Assumption and also Novation).
    Assignment and Assumption:
    when an Assignment doesn’t work due to the inability under English law to assign obligations, and/or where a Novation isn’t practicable due to loss of Security implications, English law uses an Assignment and Assumption — the rights are transferred and the new Lender also assumes the obligations of the old Lender, which is then released from those obligations.
    At Par:
    see Par Value.
    Auction-Rate Security:
    short-term debt Securities with Interest Rates set at weekly or monthly Dutch Auctions to appeal to investors seeking short-term investments.
    Audit Committee:
    a committee of the board of directors of a company that oversees a company’s audit, control and financial reporting functions.
    Auditor Arrangement Letter:
    letter that sets out the scope of the engagement between the auditors and the Issuer and Initial PurchasersManagers or Underwriters with respect to the Comfort Letter and related work, which only attaches to the Reg S portion of a deal. The letter permits the Initial Purchasers, Managers or Underwriters to use and rely on the Reg S Comfort Letter and other work outside the US and specifies that the letter does not apply to or affect rights or obligations in connection with the SAS 72 Comfort Letter in the US. Also sometimes called auditor engagement letter.
    Augmentation de capital:
    the French term for “capital increase”, referring to the issuance of shares by a French company. The total amount of the capital increase can be paid up in cash or in kind by contributing assets to the company (such as chattels, real estate and receivables).
    the signing of a Security (in global or definitive form) by the Registrar or Principal Paying Agent in order to give it legal effect.
    Authorised Person:
    a person who is authorised for the purposes of FSMA to carry out a regulated activity.
    Automatic Stay:
    the rule under US Bankruptcy law in the US that once a Bankruptcy case is commenced, creditors and other parties generally are not permitted to collect on claims against the debtor or otherwise obtain or exercise control or possession over property of the debtor’s bankruptcy estate outside of the Bankruptcy proceedings. Creditors may seek relief from the Automatic Stay by filing a motion with the Bankruptcy court.  There are also a number of exceptions to the Automatic Stay, such as governmental entities exercising their police power and the termination or liquidation of certain financial contracts.  Equivalent (or similar) restrictions exist in certain European jurisdictions — consult your favourite Latham lawyer for more information.
    a term used most frequently in the world of Revolving Facilities. It is a measure of the amount of additional borrowings or other extensions of credit (such as the issuance of Letters of Credit or obtaining of Ancillary Facilities) that would be permitted under the Revolver at any particular point in time. Term Loan Facilities are generally drawn once on the Closing Date, although some allow for delayed draws during a specified period (see Delayed Draw Term Facility). Revolving Facilities are lines of credit that generally may be drawn, repaid and redrawn throughout the life of the Facility, but only if there is Availability (in the case of an Asset-Based Loan, under the Borrowing Base formula).
    Availability Period:
    the period of time from signing the Facility Agreement during which the Facilities may be drawn, assuming satisfaction of CPs and absence of a Drawstop.
    Available Amounts Basket:
    an extra Basket (included in some Facility Agreements but certainly far from common) that may be used for dividends, Capital Expenditures, investments or the prepayment of other (usually subordinated) debt. This is a loan world replica of the way Build-up Basket and Restricted Payment capacity works in most High Yield Bond Indentures. The Available Amounts Basket generally starts with 50% of consolidated net income or that portion of Excess Cash Flow that is not captured by the Excess Cash Flow Sweep, and builds cumulatively over time (perhaps with the receipt of Equity proceeds, in deals where no Equity Sweep is present). Though available for Capex, prepayments of other debt, dividends and investments, the Available Amounts Basket is a single Basket, so usage for one purpose reduces the amount available for other purposes.
    Average Life:
    see Weighted Average Life.
Download the Apps

If you have any suggestions for additional terms or expanded or clarified definitions for the current terms, please send an email to


Avertissement : Nous vous remercions de l’intérêt que vous portez à Latham & Watkins. Si vous souhaitez nous confier un dossier mais que vous n'êtes pas encore client du cabinet, merci de ne nous transmettre aucune information confidentielle. Nous ne pouvons pas accepter un dossier avant de nous être assurés que nous sommes en mesure de vous assister et d’avoir trouvé un accord avec vous sur les termes et conditions de notre intervention. Dans la mesure où nous n’aurons pas de relation avocat-client avec vous auparavant, nous n’aurons aucune obligation de confidentialité à l’égard des informations que vous nous auriez transmises. Merci de votre compréhension.