Senior Secured Credit Agreement

A credit facility agreement explains the borrower`s responsibilities, credit guarantees, loan amounts, interest rates, loan duration, late penalties and repayment terms. The contract begins with the basic contact information of each of the parties involved, followed by a synthesis and definition of the credit facility itself. Credit facilities are widely used throughout the financial market to provide financing for various purposes Companies often implement a credit facility related to the conclusion of a capital financing cycle or the raising of funds through the sale of shares. An important consideration for each company is how it integrates debt into its capital structure, taking into account the parameters of its equity financing. With respect to PIK bonds, after using the proceeds of the guarantee for the payment of the first Bond bonds, the Senior Secured Facilities, the Senior Secured Notes, the 1.5 Link Notes and any other debt with a senior or bet passu link on the guarantees, all remaining piK bonds are general unsecured receivables, identical to our and guarantors. unsecured debt. The facility is expected to come into effect in the third quarter of 2020 and provide additional liquidity for working capital and general business purposes as Bombardier adjusts production rates to current market conditions. The facility will have a minimum utilization rate of $750 million and a three-year term. Bombardier has the right to voluntarily pay the outstanding facility in advance. In addition, the sale of Bombardier Transportation will result in a mandatory repayment of 50% of the capital of the facility that was then in arree with it. Subscriptions under the facility are paid at an agreed margin above the LIBOR reference rate and guaranteed by a security interest for certain aviation inventories and related receivables. There is no financial commitment under the facility.

The terms of interest payments, repayments and credit maturities expire in detail. They include interest rates and repayment date, when a maturity loan, or the minimum amount of payment and recurring payment dates, if a revolving credit. The agreement specifies whether interest rates can be changed and sets, if any, the date on which the loan matures. The seniority of a credit facility determines above all its importance in the hierarchy of credits for which a company is responsible. A priority credit facility is guaranteed (i.e. there are business guarantees that insure the loan in the lender`s eyes). From a legal point of view, in the event of a business failure, a priority secured loan is repaid by the sale of the security before other junior loans can qualify for assets. In addition, if the business is still operational but has fallen behind with a loan from a senior institution, the lender may force the sale of the asset to make repayments. Although rarely, even during the liquidation of a business for new lenders, it is possible to finance the day-to-day operations of that company and effectively impose a “super-senior” status on the assets. This super-seniority can supplant the seniority of existing senior credit devices.

We can structure a good senior insurance system with many depreciation options.