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Credit Facility Rulebook

credit facility meaning

All information presented herein is for informational purposes only, and Finley Technologies, Inc. does not assume any liability for reliance on the information provided. Before making any decisions that may affect your business, you should consult a qualified professional advisor. Requirements can vary by the lender and the business owner’s background and qualifications.

Contracts Counsel was incredibly helpful and easy to use. I submitted a project for a lawyer’s help within a day I had received over 6 proposals from qualified lawyers. I submitted a bid that works best for my business and we went forward with the project. Thereof, or the exercise of any other right, power or remedy.

The Company shall not be required to pay additional amounts to Barclays pursuant to this Section 5.3
to the extent that the obligation to pay such additional amounts would not have arisen but for the failure of Barclays to comply with this paragraph. As security for the full and timely payment and performance of all obligations of the Company hereunder, now existing or hereafter arising, the Company has granted to Barclays a valid, binding, enforceable,
duly perfected first priority security interest in the Collateral pursuant to the Security Agreement. None of the foregoing shall affect, impair, or prevent the vesting of any of the rights or powers granted Barclays hereunder. In furtherance and extension, and not in
limitation or derogation, of any of the foregoing, any action taken or omitted to be taken by Barclays in good faith and in the absence of gross negligence or willful misconduct shall be binding upon the Company and shall not put Barclays under any
resulting liability to the Company; provided, credit facility meaning however, that nothing herein shall relieve Barclays for any liability for its gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final,
non-appealable judgment. (a) The Company shall give Barclays at least five Business Days’ irrevocable prior notice (effective upon receipt), or such shorter
period as Barclays may agree, specifying the Business Day (which shall be no later than 60 days prior to the Termination Date) each Letter of Credit is to be issued, the account party or parties therefor and the proposed form of such Letter of
Credit. Unless otherwise specified, all accounting terms used
herein or in any other Loan Document shall be interpreted, all accounting determinations and computations hereunder or thereunder shall be made, and all financial statements required to be delivered hereunder or thereunder shall be prepared in
accordance with, generally accepted accounting principles (“GAAP”) in effect in the United States from time to time.

AccountingTools

The interest rate is usually close to the rate found on the company’s senior term debt. However, it may be variable and is based on the bank’s prime rate plus a premium, with an additional premium determined based on the company’s creditworthiness. The borrower is charged interest based only on the withdrawal amount and not on the entire credit line. The remaining portion of the revolver is always ready for use. This feature of built-in flexibility and convenience is what gives the revolver its main advantage. As for its outstanding balance, a business can have the option to pay the entire amount at once or simply make minimum monthly payments.

Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be effective as of
the opening of business on the effective date of such change in the Prime Rate or the Federal Funds Rate, respectively. Commitment means $50,000,000, as such amount may be reduced from time to time in accordance with
the terms hereof. Attorney Costs means, with respect to any Person, all reasonable fees and charges of any one primary counsel
to such Person, all reasonable fees and charges of any local counsel to such Person and all court costs and similar legal expenses. This website is using a security service to protect itself from online attacks. The action you just performed triggered the security solution. There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data.

Meet some of our Letter Of Credit Facility Lawyers

Hedging Obligations means, with respect to any Person, the net liabilities of such Person under (a) interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements, foreign exchange contracts, currency swap agreements and all other agreements or arrangements designed to protect such Person against fluctuations in interest rates or currency
exchange rates and (b) agreements designed to protect such Person against fluctuations in commodity prices. Enter the percent margin that is applied to the
collateral for the volatility risk. For example, if haircut processing
is enabled, a 1,000,000 USD piece of collateral with a defined collateral
haircut of 10 results in a 900,000 USD risk mitigation.

BZAM Completes Sale of its Midway, British Columbia, Facility – Yahoo Finance

BZAM Completes Sale of its Midway, British Columbia, Facility.

Posted: Wed, 09 Aug 2023 21:00:00 GMT [source]

The Company is a limited liability company validly existing and
in good standing under the laws of the State of Michigan. The Letters of Credit shall be used in support of obligations in connection with general corporate purposes. (c) pay
to Barclays such additional amount as is necessary to ensure that the net amount actually received by Barclays will equal the full amount Barclays would have received had no such withholding or deduction been required.

More meanings of credit facility

Credit facilities are not a good option for large one-off purchases that need to be paid back over a long-time, especially if those purchases cannot be paid down in the short-term. If financing the construction of a factory, for example, it would make more sense for a business to take out a long-term loan with a low interest rate. A retail credit facility is a method of financing—essentially, a type of loan or line of credit—used by retailers and real estate companies. Enter the predefined collateral code to categorize
a piece of collateral for bank-specific Basel II processing requirements. It is an informational attribute that does not trigger the credit
risk engine’s processing logic.

credit facility meaning

The difference is then added to the cash flow from operating activities, investing activities, and financing activities in the period. After that, we take the sum of all the scheduled debt repayments and subtract it from the cash available for debt service. As mentioned before, the company can perform a revolver drawdown if it has insufficient cash on hand to service debt. Thus, a change in the revolver is triggered by a change in a company’s debt level. Furthermore, a revolver helps with keeping a financial model balanced because it calculates any excess cash generated or cash shortfall for a given year.

A quick definition of credit facility:

A credit facility is a type of loan made in a business or corporate finance context. It allows the borrowing business to take out money over an extended period of time rather than reapplying for a loan each time it needs money. In effect, a credit facility lets a company take out an umbrella loan for generating capital over an extended period of time.

Amplify Energy Announces Second Quarter 2023 Results, Closing … – GlobeNewswire

Amplify Energy Announces Second Quarter 2023 Results, Closing ….

Posted: Tue, 08 Aug 2023 20:05:00 GMT [source]

When a company applies for a revolver, a bank considers several important factors to determine the creditworthiness of the company. They include the income statement, cash flow statement, and balance sheet statement. This Issuance Certificate (this “Certificate”) is given by
Domino’s Pizza LLC, a Michigan limited liability company (the “Company”), pursuant to Section 8.2.2 of the Letter of Credit Agreement, dated as of June 22, 2009 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among the Company and Barclays Bank PLC (“Barclays”) and in respect of the request by the Company on the date hereof for Barclays to issue [a Letter of
Credit] [Letters of Credit] (the “Proposed LC”).

While lender fees vary from agreement to agreement, there may be monthly maintenance fees, annual administrative agency fees, and one-time setup fees to create the line of credit. As the lender doesn’t have as much control of the timing or use of the line of credit, the credit terms such as interest rate may be more unfavorable compared to other loans. A company may experience an additional administrative burden in managing the credit facility requirements. As part of the loan agreement, a company must often track and maintain financial covenants and disclose certain metrics as part of external financial reporting. After pulling on a line of credit, the company is often entered into an installment plan agreement requiring ongoing maintenance, even if the immediate payment due is only interest.

credit facility meaning

Credit facilities can function as conventional term loans as well. A credit facility is a type of financing businesses use to finance ongoing capital needs. Credit facilities can be revolving, allowing businesses to draw from a line of credit on an as-needed basis, or a conventional term loan. Due to the significant nature of the credit facility, the indebtedness is with a syndicate of banks with the lead administrative agent being Citibank, N.A. The credit agreement imposes a maximum total net leverage ratio and minimum cash interest coverage ratio requirement. Subject to satisfaction of certain conditions, Tradeweb Markets can increase the credit facility by an additional $250 million with consent from all syndicate lenders. In 2019, Tradeweb Markets collaborated with financial institutions to secure a $500 million revolving credit facility.

Barclays shall have no liability with respect to, and the Company hereby
waives, releases and agrees not to sue for, any special, indirect or consequential damages suffered by the Company in connection with, arising out of, or in any way related to the Loan or the transactions contemplated thereby. Any budgets, forecasts, construction schedules, projections or other forward-looking statements contained
in the materials referenced above are based upon good faith estimates and assumptions believed by management of the Company to be reasonable at the time made. This Agreement and the other Loan
Documents have been duly executed and delivered by the Company and are the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms except as enforceability may be subject to or limited by
(i) bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws affecting the rights of creditors or (ii) general principles of equity. Promptly after the incurrence of any Reimbursement Obligation, Barclays shall apply (to the extent necessary and available therefor) any and all funds then on deposit in the Collateral Account to the repayment of such Reimbursement
Obligation so long as Barclays is not prevented from doing so by operation of law, legal proceeding or otherwise. The Borrower hereby authorizes Barclays to take such action necessary to effect such repayment (including debiting the Control Account
and, to the extent necessary, causing the sale or liquidation of investments therein in order to obtain immediately available funds (such sale or liquidation to be consummated on a recognized market or otherwise in a manner consistent with
commercially reasonable practices)) and agrees any loss resulting from any such sale or liquidation would be for the sole account of the Borrower. The bank or financial institution will normally charge a fee for setting up a line of credit.

Revolving vs close-end LOCs

Use the Credit
Facility page (FI_CREDIT_FACILITY) to define a credit facility or
exposure. However, if the difference is negative, then there wouldn’t be enough cash to make debt repayments; therefore, the company will have to draw from the revolver to cover the shortage of cash. In the hospitality industry, which is considered seasonal, a ski resort may experience a shortage in operating income during the summer months; therefore, it may not be able to cover its payroll. Additionally, if it’s making most of its sales on credit, then the company will be waiting to cash its receivables before making inventory expenses. The Company shall have deposited into the Collateral Account an
amount in Dollars in immediately available funds such that, immediately after the issuance of such Letter of Credit, the aggregate credit balance of the Collateral Account shall not be less than an amount equal to 105% of the aggregate amount of
then outstanding Letter of Credit Liabilities at such time. (a) Keep (and will cause each of its Subsidiaries to
keep) all material property and systems useful and necessary in its business in good working order and condition, ordinary wear and tear excepted and (b) maintain (and will cause each of its Subsidiaries to maintain) with financially sound and
reputable insurance companies insurance in at least such amounts and against at least such risks as are usually insured against in the same general area by companies engaged in the same or similar business.

  • Contracts Counsel was incredibly helpful and easy to use.
  • However, securing a line of credit may be difficult and expensive.
  • Use the Sub Sub
    Limits page (FI_FAC_SSUB_LIMITS) to define the sub-sub-limit amounts
    for the facility.
  • Prime Rate
    means the rate of interest per annum publicly announced from time to time by Barclays as its prime rate in effect at its principal office in New York City (the Prime Rate not being intended to be the lowest rate of interest charged by Barclays in
    connection with extensions of credit).

This Agreement may be
executed in any number of counterparts and by the parties hereto on separate counterparts and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Agreement. Delivery of an
executed counterpart of a signature page of this Agreement by facsimile transmission or electronic transmission (in pdf format) will be effective as delivery of a manually executed counterpart hereof. (c) failure by the
Company to comply with or perform any covenant set forth in the Security Agreement or the Control Agreement. On the
Closing Date, the Company shall have deposited in the Collateral Account an amount in immediately available funds equal to 105% of the aggregate Letter of Credit Liabilities with respect to of all Letters of Credit that will be issued on the Closing
Date. Barclays shall have received the Security Agreement,
duly executed and delivered by the Company.

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