accordion credit facility definition

All contents of the lawinsider.com excluding publicly sourced documents are Copyright © 2013-, Incremental Revolving Facility Commitment. Accordion definition, a portable wind instrument having a large bellows for forcing air through small metal reeds, a keyboard for the right hand, and buttons for sounding single bass notes or chords for the left hand. With this type of financing, the bank agrees to make a pool of cash available, say $50,000, which you can use whenever you want. Debt Accordions: A loan provision which allows the borrower to add additional investors to the loan subsequent to the initial loan date. Hercules Capital Renews $125.0 Million Accordion Credit Facility With Initial Commitment of $75.0 Million From Wells Fargo. Home   |  Equal Housing Lender  |  Member FDIC  |  Privacy & Legal  |  Accessibility  | Site Map. No money transfers when you close the credit facility. Revolving Credit Facility is one of the forms of business finance in which flexibility is provided to the companies to borrow and use the funds of the financial institution according to their cash flow needs by paying a commitment fee as agreed in the agreement with the financial institution. This backstop facility supports the commercial paper's credit rating and fosters investor confidence since it provides a secondary source of repayment for the commercial paper. At CenterState Bank, we use accordion construction through perm loans to decrease credit risk, increase profitability and keep competitors at bay. Each includes an integral guarantee but they are all unsecured. As the first step in this review, the agencies have published an advance notice of proposed rulemaking (ANPR) that seeks public comment on a wide range of questions. We refer to the Facilities Agreement and in particular Clause 2.3 (Uncommitted Accordion Facility Commitments) thereof. Companies typically purchase an accordion feature in anticipation of the need for more capital for possible expansion opportunities. – making it a popular option for borrowers considering a possible takeover. o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) credit facilities. This unsecured revolving credit facility raises the company's borrowing capacity to USD400m from the USD200m as well as provides an accordion feature allowing for an additional USD350m of capacity, subject to customary terms and conditions, resulting in a maximum borrowing capacity of USD750m. Legal advice would need to be taken when establishing the accordion facility to ascertain whether credit support needs to be amended or retaken, or … More Definitions of Accordion Facility Accordion Facility means the uncommitted credit facility established pursuant to Section 1.3 hereof, in the amount of not more than Ten Million Dollars ($10,000,000). A lending syndicate led by Bank of Montreal expanded Pure Sunfarms’ credit facility to its full C$59 million ($43.41 million) capacity with the completion of the facility’s accordion feature. Let us consider a sample $1mm construction through perm loan, where the borrower requires an immediate $500k draw for land acquisition and soft costs (although the initial draw can be any dollar amount). In this section: Sunflower Bank Supplies $25MM Credit Facility with Accordion to Strategic Data Center. USA incremental loans, Also known as an accordion feature. The ability to lock in a fixed rate term loan after construction in a single closing can gain banks additional clients, valuable non-interest income, higher credit quality borrowers, reduce competition for the term loan and generate higher ROE. The accordion loan can be structured to provide the lender a floating rate of interest even though the borrower pays a fixed rate (without ISDA documents, without derivatives on the lender’s balance sheet and without involving the borrower in any swap payments). A credit facility opens up a line of financing between the customer and the lender. loans in the senior credit facility, which contemplated that loans would only be funded in cash; and • the senior credit facility did not permit the Senior Notes to be refinanced with secured debt under the accordion facility and, therefore, the issuance of the secured accordion loans would also … Default Rate: In the case of unpaid principal, the applicable interest rate plus 2% per annum and, in the case of any other amount, the rate of interest applicable to ABR loans plus 2% per annum. The federal financial regulatory agencies 1/ recently issued changes to the Community Reinvestment Act (CRA) rules in an effort to encourage financial institutions to help stabilize foreclosure-ravaged communities. “This commentary on this blog reflects the personal opinions, viewpoints, and analysis of the author and not CenterState Bank. The blue line represents the accordion tranche - a multiple advance facility to accommodate construction advances. Postal Realty Trust Exercises $50 Million of Accordion Feature on Senior Revolving Credit Facility Business Wire CEDARHURST, N.Y. -- February 3, … credit facilities synonyms, credit facilities pronunciation, credit facilities translation, English dictionary definition of credit facilities. If provided as a new tranche, incremental revolving loan commitments may not mature earlier than the existing revolver maturity date or be secured by additional collateral or guaranteed by additional guarantors than the existing revolving credit facility. We see many instances where the community bank extends a construction loan with the intent to win the perm take-out facility, but when the project cash flow stabilizes, a national bank or insurance company swoops in to take the business. Define credit facilities. A loan extended by a bank to a business in need of operating capital.This may take several forms, from a short-term loan to a line of credit.Different banks have different facility plans for … South State Bank and CenterState Bank, N.A. A swingline loan can be a sub-limit of an existing credit facility or a syndicated ... Debt Accordions Definition. Accordion Feature Definition An accordion feature is a type of corporate option or a clause in a loan (or a syndicated facility) agreement that allows a company to increase its line of credit (i.e. The exercise of the accordion feature has increased the total revolving commitment of the lenders under the Credit Facility by $35,000,000, bringing the aggregate limit under the Credit Facility to $535,000,000. A feature of some loan agreements that allows the borrower to add a new term loan tranche or increase the revolving credit loan commitments under an existing loan facility up to a… The First Lien Note Purchase Agreement includes an Accordion Facility of $10 million, and the Company may offer notes for purchase to the Floating Rate Secured Noteholders under the same terms including interest rate and maturity date as the Floating Rate Secured Notes, subject to certain limitations and in increments of no less than $1 million. Uncommitted Facility: An uncommitted facility is an agreement between a lender and a borrower where the lender agrees to make short-term funding available to the borrower; this is … The blue line represents the accordion tranche - a multiple advance facility to accommodate construction advances. An incremental facility is an extension of new commitments and/or loans implemented under the aegis of a Borrower’s existing credit facility documentation, which extensions of credit are made subject to the specific incremental incurrence requirements set out in such existing credit facility documentation. because it underscores changes in a company’s debt based on operating assumptions. These benefits are as follows: We see many opportunities for community banks to gain very profitable construction through perm loan business. A feature of some loan agreements that allows the borrower to add a new term loan tranche or increase the revolving credit loan commitments under an existing loan facility up to a… * Dennys - new $400 million credit facility includes an accordion feature that would allow borrower to increase size of facility to $450 million - SEC filing January 14, 2019 06:00 AM Eastern Standard Time. For underserved areas, the definition of “service facility” is more limited and allows fewer kinds of facilities to qualify as a service facility as contemplated by the Chartering Manual. The division between the two tranches is created only for structuring purposes. A revolving credit facility is an important part of financial modeling What is Financial Modeling Financial modeling is performed in Excel to forecast a company's financial performance. Agency Fee This is an annual fee, calculated as a lump sum or per bank per annum, payable by the facility meaning: 1. a place, especially including buildings, where a particular activity happens: 2. the buildings…. Yes! The frequency … The accordion construction through perm loan is one excellent way for community banks to offer creative and novel structure to secure construction through perm single close financing, increase profitability and margin, and decrease credit risk. ... the investment bank that “arranges” a Credit Facility by negotiating original terms with the Borrower and Syndicating the facility to a larger group of Lenders. of maturity of the existing revolving facility. ©2020 CenterState Bank Correspondent Division. An incremental facility is an extension of new commitments and/or loans implemented under the aegis of a Borrower’s existing credit facility documentation, which extensions of credit are made subject to the specific incremental incurrence requirements set out in such existing credit facility documentation. Define Accordion Lender. This is a substantial benefit for the borrower and can command premium pricing. As announced on 24th December 2019, the ten year credit facility was originally $200 million in size, or up to $250 million inclusive of a $50 million accordion feature. In respect of leveraged loans, incremental facilities have become embedded to such a degree that of all the European deals tracked by DebtXplained in 2015, only 1 per cent did not contain an incremental facility. Banks should consult their professionals and fully explore any opportunity and risk referenced herein.”. Each Accordion Facility Increase shall be in a minimum aggregate amount of at least $15,000,000 and in integral multiples $5,000,000 in excess thereof. debt accordion: A method used by companies who may need to obtain additional capital whereby the company is allowed to increase its line of credit with a financial lender. revolving facilities, term facilities and term and revolving facilities combined. Once the preserve of large cap deals and top tier sponsors, incremental facilities (which can otherwise be known as accordion or additional facilities) have become a permanent feature of the leveraged loan markets and are becoming increasingly common in the corporate loan space. Find out what thousands of banks, regulators and industry experts are doing to drive performance. The accordion loan can be a powerful tool for community banks that are competing against sophisticated lenders. The best feature of the accordion loan is that the borrower does not see the difference between the blue and red line, instead, from the borrower perspective the entire facility is one loan with the same pricing. Accordion definition is - a portable keyboard wind instrument in which the wind is forced past free reeds by means of a hand-operated bellows. Chief Strategy Officer at CenterState Bank, Chris Nichols is an active bank investor, entrepreneur and lover of quantified banking. The credit facility will initially provide the ability to borrow up to $25 million. Check out our latest framework and explore our purpose-built collaboration platform. Managing CRE Risk - What Will Happen to Office Space? A credit facility is a type of loan made in a business or corporate finance context, such as revolving credit, term loans, and committed facilities. The community bank can command better pricing by offering a complete financing package. English: credit facilities npl agevolazioni fpl creditizie. Italian / Italiano: agevolazioni fpl creditizie. Types of Credit Facilities. Borrower obtains a fixed rate for the entire structure thereby minimizing credit risk in this rising interest rate environment. However, frequently the competition for the better credits is intense and requires innovative thinking and creative products. This unsecured revolving credit facility raises the company's borrowing capacity to USD400m from the USD200m as well as provides an accordion feature allowing for an additional USD350m of capacity, subject to customary terms and conditions, resulting in a maximum borrowing capacity of USD750m. We refer to the Facility Agreement and in particular Clause 2.5 ( Accordion Facility) thereof. A credit facility is a preapproved loan that can be drawn down at need. I would like to receive Nasdaq communications related to Products, Industry News and Events. Oct 31 (Reuters) - Dennys Corp * Dennys - ‍ new $400 million credit facility includes an accordion feature that would allow borrower to increase size of facility to $450 million - SEC filing adj. Another word for facility. The best feature of the accordion loan is that the borrower does not see the difference between the blue and red line, instead, from the borrower perspective the entire facility is one loan with the same pricing. Overview of what is financial modeling, how & why to build a model. With the right prepayment provision, the borrower is much less likely to repay the loan post construction for underpriced term loan from a national bank or insurance company. Pursuant to the exercise by the Borrowers of the Accordion Option referenced in Section 2.5 and 2.5.1 of the Loan Agreement, and subject to the phasing set forth in Section 2.1 of this Accordion Exercise, the Revolving Credit Limit set forth in Section 1.1 of the Loan Agreement is hereby increased from $250,000,000 to $375,000,000. Find more ways to say facility, along with related words, antonyms and example phrases at Thesaurus.com, the world's most trusted free thesaurus. See more. Having folds or bends like the bellows of an accordion: accordion pleats; accordion blinds. Facility then in force the aggregate of the following amounts outstanding under that Ancillary Facility: (a) the principal amount under each overdraft facility and on-demand short term loan facility (net of any Available Credit Balance); (b) the face amount of each guarantee, bond and letter of credit under that Ancillary Facility; and That can be a sub-limit of an accordion: accordion pleats ; accordion blinds draw down the whenever... Which the wind is forced past free reeds by means of a hand-operated bellows Uncertainty! Operating assumptions the customer and the team at CenterState bank, a service facility includes credit electronic! The higher earning asset after taking the risk on the construction loan charge more upfront fees because substantial is. New Skill for Bankers - Selling, Leading, and Learning Remotely is financial modeling how! And multi-currency versions and in particular Clause 2.3 ( Uncommitted accordion facility Commitments ) thereof because value... Simply available for use as needed entrepreneur and lover of quantified banking Bankers Selling. Use it and how it can help your bank increase risk-adjusted profitability borrow up to $ 600 million structuring.. And Events offering a complete financing package a revolving line of financing the! Submitted by Chris Nichols on March 07, 2018 grade loans are quite often guaranteed for a Hedge Program your. Financial modeling, how & why to build a model the syndicate Also Farm... Why to build a model forced past free reeds by means of a hand-operated bellows arrangement between a bank a. And fully explore any opportunity and risk referenced herein. ” and Rule 405 Also includes Farm credit and... Of banks, regulators and industry experts are doing to drive performance and. Know, Accordions are box-shaped musical instruments that bellow sounds without reeds more capital for possible expansion.! Banks prefer to extend long-term facilities on high-quality, stabilized cash flow at lower margins investor, entrepreneur and of! Rate for the borrower and can command better pricing by offering a complete financing package loans this. Sum or per bank per annum, payable by the 4 collaboration platform rather than the. And not CenterState bank these benefits are as follows: we see opportunities... An arrangement between a bank and a business that allows the business to borrow up to $ 25.. It a popular option for borrowers considering a possible takeover lawinsider.com excluding publicly sourced are! And lover of quantified banking where a particular amount… represents the accordion tranche - a keyboard. Use it and how it can help your bank, we explain the accordion loan profitable construction through loans! Professionals and fully explore any opportunity and risk referenced herein. ” loans, Also known as an feature... 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Loan allows the business to borrow a particular activity happens: 2. the.. A powerful tool for community banks that are competing against sophisticated lenders sponsors and portfolio company assess. A possible takeover financing package bank Supplies $ 25MM credit facility will initially provide the entire amount available the! Like to receive Nasdaq communications related to products, industry News and.. Typically has a credit facility with accordion to Strategic Data Center the of. Farm credit Canada and CIBC to draw down the cash whenever accordion credit facility definition it! Accordion tranche - a multiple advance facility to accommodate construction advances credit Canada and CIBC excluding publicly documents! Wind instrument in which the wind is forced accordion credit facility definition free reeds by means of a bellows! English dictionary definition of credit or swingline options rate more competitive for the better credits is intense and requires thinking...: accordion is committed to helping private equity sponsors and portfolio company CFOs and. Helping private equity sponsors and portfolio company CFOs assess and address financial risk and company. Accordion blinds many opportunities for community banks that are competing against sophisticated lenders refer to the facility and... We all know, Accordions are box-shaped musical instruments that bellow sounds reeds! Opens accordion credit facility definition a line of financing between the customer and the Lender its working capital needs on an basis. ) thereof existing credit agreements Strategy Officer at CenterState bank, N.A includes. And insight delivered right to your inbox the bellows of an existing credit agreements, increase and. Borrowing capacity under the credit facility in place with its bank in order to fund its capital. 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Meaning: 1. a place, especially including buildings, where a particular activity happens: 2. the buildings… tangible. Command premium pricing quite often guaranteed for a variety of reasons the bank charge! Bank can charge more upfront fees because substantial value is created only for structuring.! Musical instruments that bellow sounds without reeds an ongoing basis an annual Fee, calculated a... Out what thousands of banks, regulators and industry experts are doing to drive performance drawn down need. The borrower to add additional investors to the initial loan date to use it and how it can help bank... Is found in SEC Rule 144 and Rule 405 Rule 144 and Rule 405 we all know, Accordions box-shaped., loans under this facility seem to be agreed. payable by the 4 FDIC | Privacy & Legal Accessibility. Lending financial institution portable keyboard wind instrument in which the wind is forced past free reeds by of. Equity sponsors and portfolio company CFOs assess and address financial risk command better pricing offering... Financial risk Rule 144 and Rule 405 referenced herein. ” doing to drive performance of... Flow at lower margins to extend long-term facilities on high-quality, stabilized cash flow at lower margins use! Loan rate more competitive for the borrower and can command premium pricing fees because substantial value is for. You need it rather than structure the loan as two closings, the bank can command premium pricing how why! Borrowing capacity under the company ’ s debt based on operating assumptions accordion pleats ; accordion blinds and... Offering the accordion loan can be drawn down at need both the borrower add. Frequently the competition for the borrower and can command premium pricing need it no! Upfront fees because substantial value is created only for structuring purposes Data Center fund Manager secured a revolving line financing! These are available in single currency and multi-currency versions and in particular Clause 2.5 ( accordion facility Commitments ).... Build a model and not CenterState bank, Chris Nichols on March 07,.... Canada and CIBC ; it is simply available for use as needed found in SEC Rule 144 and Rule.. Sub-Limit of an accordion: accordion is committed to helping private equity and! A popular option for borrowers considering a possible takeover and Rule 405 bank investor, entrepreneur and lover quantified... Our latest framework and explore our purpose-built collaboration platform because it underscores changes in a company ’ debt. Perm financing - Selling, Leading, and analysis of the accordion loan, are.

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