medium · Debt Capital Markets primary-issuance-syndication
In a committed financing package, what is the purpose of a 'flex' provision?
- To give the underwriting banks the right to adjust interest rates or fees to clear the market during syndication.
- To provide the investor with a standing option to convert the outstanding debt into common equity at a stated conversion premium.
- To allow the issuer to increase the committed loan size at will, without seeking any additional approval from the lenders.
- To let the borrower skip scheduled interest payments whenever cash flow falls below a set multiple.
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