medium · Debt Capital Markets credit-ratings-risk
What happens if a borrower makes a voluntary prepayment during the year in relation to their end-of-year ECF sweep requirement?
- The borrower is penalized and forced to pay a higher sweep percentage at year-end.
- The voluntary payment is disregarded entirely and the full ECF sweep is still owed.
- The mandatory ECF sweep is automatically suspended for the following three fiscal years.
- The voluntary prepayment usually reduces the ECF sweep obligation dollar-for-dollar.
Sign up free to see the explanation and track your rank →
More Debt Capital Markets credit-ratings-risk practice
- In the context of Debt Capital Markets, what is a leverage-based margin ratchet?
- Why is the Administrative Agent's role important for the margin ratchet?
- What happens to the credit spread of a 'fallen angel' issuer?
- In Debt Capital Markets, who is generally the 'payer' of the credit spread in a standard b
- In a cov-lite loan, which event would most likely trigger a financial ratio test?
- In the context of credit covenants, what is the primary difference between a maintenance c
- In a Credit Default Swap (CDS), what is the primary obligation of the protection seller?
- Which of the following is NOT typically a 'Restricted Payment'?