What does accordion mean in finance?
An accordion feature is an option that a company can buy that gives it the right to increase its line of credit (or similar type of liability) with a lender. Companies typically purchase an accordion feature in anticipation of the need for more working capital for possible expansion opportunities.
What is a MFN agreement?
Most favored nation clauses (MFNs), sometimes also referred to as most favored customer clauses, are agreements in which a supplier agrees to treat a particular customer no worse than all other customers (see Standard Clause, General Contract Clauses, Most Favored Customer (www.practicallaw.com/8-510-7389)).
What is MFN contract?
Michael Arin. Share: Most-Favored Nations (MFN) clauses (also known as antidiscrimination clauses or most-favored customer clauses) are common in business today. These provisions require that the supplier will treat a particular customer no worse than all other customers (and sometimes even better).
What is a Swingline facility?
A swingline facility is a sub-limit of a syndicated revolving credit loan whereby a lender makes a short term (operating not more than five days) loan, in smaller amounts, on shorter notice, and with a higher interest rate than is otherwise available for revolving credit loans.
Is an RCF a committed facility?
A revolving credit agreement is similar to a term loan because it is usually a committed facility that provides a maximum amount of capital over an agreed period.
Is MFN legal?
No court analyzing the competitive merits of MFNs has found them to be illegal under any antitrust law. com/9-502-0833) (see Practice Note, US Antitrust Laws: Overview: Section 1 of the Sherman Act: Agreements That Unreasonably Restrain Trade (www.practicallaw.com/9-204- 0472)).
What is an accordion feature on a line of credit?
What Is an Accordion Feature? An accordion feature is an option that a company can buy that gives it the right to increase its line of credit (or similar type of liability) with a lender. Companies typically purchase an accordion feature in anticipation of the need for more working capital for possible expansion opportunities.
Which is the best definition of an accordion facility?
Accordion Facility means the revolving line of credit described in Section 2.2, below. Accordion Facility means the uncommitted term loan facility made available under this Agreement as described in clause 2 (The Facilities). Accordion Facility means the extension of credit to Borrower made by Lenders pursuant to the provisions of Section 2.6.
Why does a company need an accordion agreement?
Companies commonly include an accordion agreement, which comes at extra cost to the borrower, if they anticipate needing additional capital to fund expansion plans in the future but where the timing remains uncertain.
When do you need a debt accordion loan?
For instance, a company that’s a desirable acquisition target might be quickly snapped up by a competitor if funds are not readily available. Debt accordions can particularly come in handy for up-and-coming startups with a novel and innovative idea or product.