medium · Debt Capital Markets primary-issuance-syndication
In the context of a syndicated loan, what is the function of the 'price flex' clause during the bookbuilding process?
- It allows investors to change the seniority of their claim after the deal closes.
- It allows the borrower to decrease the loan size if interest rates rise.
- It permits the lead banks to adjust the interest margin or OID to clear the market based on investor demand.
- It mandates that the loan be converted to a high-yield bond if covenants are breached.
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