Undertakings
| Title | Description |
|---|---|
| Information Undertakings | This nugget looks at the information undertakings. It explains the relationship between GAAP and IFRS as well as the difference between a frozen and a moving GAAP provision and the role of the Auditors’ certificate on Compliance Certificates. It also looks at the other information undertakings, highlighting the obligation to notify of a Default. |
| Financial Covenants - Part 1 | This part of this nugget looks at the purpose of the financial ratios and their relationship with, and impact on, other parts of the agreement, particularly the material adverse change clause and the cross default clause. It focuses on three common income related ratios: interest cover, leverage and cash flow. |
| Financial Covenants - Part 2 | This part of this nugget looks at some financial ratios which are not income related. It focuses on gearing, liquidity, Tangible Net Worth and capital expenditure. |
| General Undertakings | This nugget reviews the undertakings in the LMA investment grade loan agreement, focussing in particular on the negative pledge and the no disposals undertaking. It discusses the purpose and limitations of the negative pledge and reviews what is prohibited by the clause. It also reviews the no disposals clause and suggests some additional exceptions which borrowers might need in the negative pledge and no disposals clauses. |