A question of timing: The applicable test date in leveraged finance

An inability to satisfy ratio or incurrence-based tests in leveraged finance loan agreements can lead to a borrower group being unable to draw debt it has paid for, or complete transactions it has legally committed to. Conversely, those same financial tests provide important guardrails for lenders. It is not surprising then that exactly when those tests must be satisfied is closely scrutinised by sponsors with a view to obtaining maximum flexibility for their portfolio businesses.... By: Hogan Lovells