That Will Cost You! Prepayment Provisions in Credit Agreements

Review this discussion of prepayment premium market trends. Lenders commonly permit borrowers to voluntarily prepay a credit facility prior to maturity, but often require borrowers to pay a premium for prepayment. A prepayment premium is designed to compensate the lenders for not receiving their expected return on the funds advanced due to lost interest payments.

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Related Content

• Repayment and Repayment Provisions in Credit Agreements
  Read this practice note discussing prepayment and repayment of loans under a credit facility, whether upon the occurrence of a scheduled payment date or a certain triggering event (such as receipt of excess cash flow or extraordinary receipts, issuance of debt or equity, or an asset sale).

• The Client Asks: Can We Pay Down Our Debt?
  Check out this practice note explaining how you should proceed when a client calls and asks whether the credit agreement permits them to pay off their loans.

• Refinancing Resource Kit
  Refer to this resource kit during the refinancing process. It includes detailed practice notes, templates, and checklists.

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