medium · Corporate Credit Analysis covenants
A borrower has an Available Amount basket that includes 'Declined Excess Cash Flow (ECF) Prepayments'.
If a lender refuses a mandatory $10 million ECF sweep, what happens to that $10 million for covenant purposes?
- It is permanently blocked from being distributed
- It reduces the CNI contribution for the next period
- It is added to the Available Amount basket
- It must be used to pay down the revolver
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