easy · Private Credit & Debt documentation-covenants-terms
Why would a lender require a 'Share Pledge' over the material subsidiaries of a borrower?
- To guarantee that the subsidiaries will never be profitable during the loan period.
- To prevent the subsidiaries from issuing any new products or services.
- To ensure the subsidiaries' employees are paid directly by the lender.
- To allow the lender to take ownership of the subsidiaries quickly in an enforcement scenario.
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