medium · Debt Capital Markets credit-ratings-risk
What is the primary objective of 'MFN Sunset' provisions often found in mid-market leveraged loans?
- To cap the aggregate amount of incremental debt the borrower may later raise
- To terminate the MFN protection after a specified period following the initial closing
- To reduce the borrower's interest-rate margin on the existing term loan over the life of the deal
- To permanently bar the borrower from ever issuing any higher-priced incremental debt
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