Equity Cure In Credit Agreement

With the frequency of equity cures, the period during which a borrower can use the equity cure to remedy their potential breach of a financial obligation is an important consideration for both borrowers and lenders. Borrowers will certainly want to fight for a longer healing time to give their members or shareholders more time to inject the necessary equity. On the other hand, lenders will prefer a shorter healing time to ensure that any breach of a financial obligation is cured in a timely manner. Often, the period during which the borrower can exercise the capital cure corresponds to the healing period in force for the provision of the borrower`s financial statements under the loan agreement, usually between 15 and 45 days. Another important consideration for lenders when trading a capital provision is the level of allowable capital revenue. If the borrower is able to negotiate the use of preferred shares, the lender would generally dictate the characteristics of those shares by providing that all the traded characteristics of those shares, for example. B conversion, preferential dividends, repayment, maturity, etc.,.