Companies may purchase an accordion agreement if they anticipate capital needs in the future but are unsure if and when those funds will actually be required. They do not require a new loan agreement, making it easy for corporate borrowers to gain relatively quick access to funds if and when they need them. Additionally, the Facility has a USD 600 million accordion … Any Accordion Facility Increase may be denominated in Dollars, any Designated Foreign Currency and, to the extent that every Lender and Additional Lender providing such Accordion Facility Increase is able to make Loans in another agreed currency, such other currency. The extra funds may be used to acquire other businesses, to boost working capital, the money available to fund a company’s day-to-day operations, or to meet other needs. The interest rate is from 1-6 months LIBOR plus margin of 3.5%. Each Accordion Facility Increase shall be in a minimum aggregate amount of at least $15,000,000 and in integral multiples $5,000,000 in excess thereof. The deal provides for a committed revolving credit facility of GBP 130 million (USD 165m/EUR 148m) and an uncommitted accordion facility of up to GBP 60 million with HSBC, NIBC, ING and Santander, the UK environmental infrastructure investment fund said on Monday. The option to increase a loan term or credit amount with a financial lender is most often offered on commercial accounts and generally stipulated within the existing terms of a credit agreement already in place. - New Agreement Features $60 Million Revolving Credit Facility, a $40 Million Term Loan and an Uncommitted $50 Million Accordion - SALT LAKE CITY, May 06, 2019 (GLOBE NEWSWIRE) -- … Frequently, each increment, or increase, is contingent on the company or borrower complying with existing financial covenants and potentially hitting certain targets. An accordion feature is an option a company can obtain, giving it the right to increase a line of credit with a creditor. PRESS RELEASE PR Newswire ... that provides for a C$140.0 million revolving term loan facility with an additional uncommitted accordion … The timeliness of funds can be critical in some environments. Usually, these facilities will feature a cap limiting the total amount that can be borrowed and the maximum number of times it can be used. The maturity was in 2019 extended with one year, until 1 July 2026. Credit increases are optional, meaning that companies privy to this arrangement are not obligated to take on additional debt. Any bank or financial institution (an “Uncommitted Accordion Facility Lender”) which accepts an Uncommitted Accordion Facility Commitment by countersigning an Uncommitted Accordion Facility Commitment Notice and delivering it to the Agent shall, upon the countersignature of such Uncommitted Accordion Facility Commitment Notice by the Agent become Party to this Agreement as a Lender: These types of loans generally have several conditions attached, including a maximum amount of total incremental debt the company can take on and a cap on the number of times the incremental facility may be used. For instance, a company that’s a desirable acquisition target might be quickly snapped up by a competitor if funds are not readily available. Existing lenders agreeing to allow accordion capacity will have two motivations: first they will wish to ensure (as is customary) that there is no requirement for existing lenders to participate in the accordion debt; the uncommitted nature of the facility is clearly important from a credit and regulatory capital perspective. The facility bears interest at an adjusted LIBOR rate plus an applicable margin ranging from 1.5% to 2.0% and matures in 2022. * Wabash-ABL credit agreement provides uncommitted accordion feature allowing for increase to availability under revolving credit facility up to … And finally, the new facility includes an uncommitted accordion of $250 million. Debt accordions are simple and cost-effective. The RBL facility was established in 2018 and is a senior secured seven-year facility. All contents of the lawinsider.com excluding publicly sourced documents are Copyright © 2013-. The new facility includes an uncommitted accordion option to increase drawings to $800 million, subject to satisfaction of certain conditions. Making additional credit increases contingent on the business exceeding pro forma expectations gives financial institutions (FIs) some peace of mind, ensuring more of them are willing to extend credit to a company that would otherwise be deemed too risky to lend to. The availability period of the facility is to 31 December 2019. incremental facilities (which can otherwise be known as accordion or additional facilities) Accordion Facility means the uncommitted credit facility established pursuant to Section 1.3 hereof, in the amount of not more than Ten Million Dollars ($10,000,000). The First Lien Note Purchase Agreement includes an Accordion Facility of $10 million, and the Company may offer notes for purchase to the Floating Rate Secured Noteholders under the same terms including interest rate and maturity date as the Floating Rate Secured Notes, subject to certain limitations and in increments of no less than $1 million. (b) Similar to ECB Guidance. And finally, the new facility includes an uncommitted accordion of $250 million. A personal loan allows you to borrow money and repay it over time. The Amended and Restated Second Lien Note Purchase Agreement includes an Accordion Facility of $10 million, subject to similar terms as those described above for the First Lien Note Purchase Agreement. Debt accordions, like the portable, box-shaped musical instruments they are named after, can be pulled and stretched to lengthen in size as needed, creating flexibility for borrowers. In April 2016, the Company increased its Revolving Credit Facility by a further£200 million to £500 million until December 2016, through exercise of the Accordion Facility. There is an uncommitted option for one-year extension. A pro-rata tranche is a portion of a syndicated loan that is comprised of two features: a revolving credit facility, and an amortizing term loan. Taking time to rehash credit terms may be counterproductive and give competitors the chance to seize the opportunity. The Facility consists of a USD 1,667,250,000 three-year committed tranche and a USD 897,750,000 one-year uncommitted tranche. A revolving loan facility allows a borrower to obtain a loan with the flexibility to drawdown, repay, and redraw loans advanced to it. Here’s what a personal loan is, how it works, and how to use one. - New Agreement Features $60 Million Revolving Credit Facility, a $40 Million Term Loan and an Uncommitted $50 Million Accordion - SALT LAKE CITY, May 06, 2019 (GLOBE NEWSWIRE) -- Clarus Corporation (NASDAQ: CLAR) (“Clarus” and/or the “Company”), a company focused on the outdoor and consumer industries seeking opportunities to acquire and grow businesses that can generate … In addition, the New Credit Facilities provide CRH access to an uncommitted accordion facility that would increase the amount of revolving credit facilities available to CRH by US$25 million. example, (uncommitted) incremental or accordion facilities, even if they are never actually used. The new credit facility includes an uncommitted accordion feature of $200 million. Dye & Durham Limited Announces New Credit Facility. And finally, the new facility includes an uncommitted accordion of $250 million. The accordion feature is an added option that requires the business to pay a premium for the right to use it. Additionally, the Facility has a USD 600 million accordion … All expectations are negotiated at the onset, during which a pro forma plan is agreed upon by all parties. Under the terms of the new agreement, Clarus has access to up to a $75 million senior secured revolving credit line, with an additional $75 million uncommitted accordion feature. The increase in commitments was made, at the request of the Company, pursuant to the credit facility’s uncommitted “accordion feature.” Revolving credit is an agreement that permits an account holder to borrow money repeatedly up to a set limit while repaying in installments. The interest rate on the extended credit, along with most other terms, often remains the same as on the original credit line. The Revolving Credit Facility includes a … Debt accordions will limit the total amount that can be borrowed and any new borrowing will be contingent on the company complying with its existing financial covenants. Accordion features have become increasingly prevalent in the leveraged loan market. Law firm Herbert Smith Freehills advised Hipgnosis on both the £65m credit raise last year, and the newly-announced £150m facility (which comes with an uncommitted accordion, and is categorized as a New York law Net Asset Value-based RCF). A future advance is a clause in a mortgage which provides for additional availability of funds under the loan contract, so the borrower can rely on obtaining funds from the lender under the terms of the contract without being required to obtain another loan. The new definition may therefore capture uncommitted incremental borrowings, 'accordion' facilities and side-by-side facilities (see 'Areas of Concern' below). In addition, the New Credit Facilities provide CRH access to an uncommitted accordion facility that would increase the amount of revolving credit facilities available to CRH by US$25 million. A debt accordion, also known as an incremental facility, is a provision that allows a borrower to expand the maximum amount allowed on a line of credit (LOC), or to add a term loan to an existing credit agreement. The facility is at USD 150 million with an additional uncommitted accordion option of USD 150 million. Sample 1 Based on 1 documents How Companies use Revolving Loan Facilities. Baskets and ratios for additional permitted debt may also, arguably, be factored into the calculation. The Restated Credit Agreement provides for (i) a $50.0 million revolving credit facility; and (ii) a $25.0 million uncommitted accordion facility subject to the satisfaction of certain conditions (collectively, the “Revolving Credit Facility”). The interest rate applicable to borrowings under the new credit facility has been reduced to LIBOR plus 2.50% and the advance rate under the new credit facility has been increased to a … Similarly, the EFF facility limit has been increased from NOK 700 million to NOK 1,000 million and an additional tranche of NOK 500 million is available on an uncommitted accordion basis. In addition to the committed NOK 1 billion, a further NOK 0.5 billion is available on an uncommitted “accordion” basis. Typically, the interest rate, the amount charged for borrowing money, and other terms will remain the same as on the original credit line or loan agreement. The facility has a $100 million uncommitted accordion feature, which, subject to satisfaction of specific terms and conditions, would provide for increased availability under the credit facility. The Facility consists of a USD 1,709,500,000 three-year committed tranche and a USD 920,500,000 one-year uncommitted tranche. A debt accordion, also known as an incremental facility, is a provision that allows a borrower to expand the maximum amount allowed on a line of credit (LOC), or to add a … Excludes committed undrawn backstop liquidity facilities meeting the requirements of the Basel III liquidity standards (for example, common in 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. Some lenders, however, will provide more flexible arrangements and may even offer unlimited debt accordions, depending on the profile of the borrower. Debt accordions can particularly come in handy for up-and-coming startups with a novel and innovative idea or product. The increase in commitments was made, at the request of the Company, pursuant to the credit facility's uncommitted "accordion feature." today that Barclays has committed $50 million to the Company’s revolving credit facility, bringing total commitments to approximately $1.2 billion. Debt accordions are provisions that allow a borrower to increase the maximum allowed on a credit line or add a term loan to it. Meanwhile, with this source of revolving capital, the company can get quick access to the funds it needs to capitalize on its potential when and where opportunities present themselves. Clarus Corporation, the parent of Black Diamond, Sierra and Pieps, has signed a new $75 million credit facility agreement, plus an uncommitted accordion feature providing for an additional $75 million, for a total of up to $150 million with J.P. Morgan … The offers that appear in this table are from partnerships from which Investopedia receives compensation. 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