Conditions precedent Definition

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GLOSSARY

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What does Conditions precedent mean?

In leveraged finance transactions, conditions precedent are commonly split into conditions precedent to signing and conditions precedent to closing. Conditions precedent to signing are conditions that must be satisfied by the borrower before the facility agreement can take effect. Conditions precedent to closing are conditions which must be satisfied by the borrower before it is entitled to draw down funds under the facilities agreement.

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Taking security—fixed charge—checklist

Taking security—fixed charge—checklist Scope of this Checklist This Checklist sets out the factors to consider when a company is proposing to grant a fixed charge. It assumes that an English or Welsh company will be granting a number of fixed charges to a lender situated in England or Wales. In this Checklist: • the company granting the fixed charge is called the 'chargor' • the entity to which the charge is granted is called the 'chargee', and • the document containing the fixed charge is called the 'security document' Fixed charges can be granted in a standalone security document or form part of the security created by a debenture (see: Documentation required to create a fixed charge below). For more information, see: Practice Note: Fixed and floating charges. Preliminary questions before taking security by way of a fixed charge • Is a fixed charge the appropriate method of taking security? ◦ A fixed charge can be granted by a company, limited liability partnership and other bodies corporate. It can also...

Reviewing board minutes—checklist

Reviewing board minutes—checklist STOP PRESS: The Economic Crime and Corporate Transparency Act 2023 (ECCTA 2023) received Royal Assent on 26 October 2023. ECCTA 2023, Pt 1 contains a substantive package of proposals enhancing the role of Companies House and increasing the transparency of UK corporate entities. The provisions of the ECCTA 2023 come into force over an extended period. Many of the provisions in the legislation require detailed secondary legislation and guidance, and the construction of new technical processes and tools to implement the reforms. For more information, see Practice Notes: The Economic Crime and Corporate Transparency Act 2023—what Banking & Finance lawyers need to know, The Economic Crime and Corporate Transparency Act 2023—tracker and Corporate transparency reform—changes to company registers. Board minutes As part of the pre-completion process and satisfaction of the conditions precedent, lawyers acting for a lender in a typical financial transaction need to review the board minutes of the borrower, guarantor and any security provider. Following a board meeting of a company, the directors must...

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Ireland—Signing off on the documentary conditions precedent in a loan transaction

Ireland—Signing off on the documentary conditions precedent in a loan transaction Each of the documentary conditions precedent (CPs) to funding must be satisfied (or waived) before funding can take place. Who signs off on the documentary CPs? Once all of the documentary CPs have been satisfied (or waived), the lender (or, in syndicated transactions, the facility agent) will usually be required by the terms of the facility agreement to confirm to the borrower, in writing, that this is the case. However, whether the documentary CPs have been satisfied will have been determined by a number of factors: legal, commercial and factual issues will have been addressed by a combination of the lender(s) and the lawyers acting for the lender(s). Therefore, signing off on the documentary CPs will involve both the lender(s) and lawyers. It is important, however, to note that the final commercial decision on whether to lend is made by the lender(s) rather than their lawyers. Role of the lawyers for the lender(s)—issuing a CP satisfaction letter Finding a...

Bridge to bond facilities

Bridge to bond facilities What are they? A bridge to bond facility is a type of acquisition financing where the buyer requires the certainty of a fully committed financing package, but which is intended to be replaced in the future with a mid- to long-term financing in the form of high yield bonds. In markets where acquisitions typically do not have a financing condition, a bridge financing package (which is available to be drawn if necessary) is often a key component to a successful bid. This Practice Note focuses on bridge to high yield bond financing. However, investment-grade borrowers also commonly use bridge facilities for acquisitions. Bridge commitments for investment-grade borrowers differ in many ways, including: lower pricing, much less restrictive covenants (the terms often follow the borrower’s existing credit facilities) and the securities demand mechanic may not be included (or if included, it may only be triggered by ratings downgrade). Bridge commitments for investment grade borrowers may also have longer maturities (or extension rights exercisable by...

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Precedent signing and closing memorandum for a commercial mortgage-backed securities transaction

Precedent signing and closing memorandum for a commercial mortgage-backed securities transaction A Signing and Closing Memorandum is required to assist the smooth execution of a complex transaction. This precedent signing and closing memorandum sets out steps to be taken in order to close a commercial mortgage-backed securities (CMBS) transaction. Additional documents or steps may be required depending on the specific transaction. [ISSUER] [CURRENCY][AGGREGATE AMOUNT] CLASS [A] NOTES DUE [•] AND [CURRENCY] [AGGREGATE AMOUNT] CLASS [B] NOTES DUE [•] (THE NOTES) SIGNING AND CLOSING MEMORANDUM 1 Parties involved in the transaction THE PARTIES Issuer [●] Holdings [●] Originator [●] Arranger [●] Manager [●] Trustee [●] Security Trustee [●] Paying Agent [●] Account Bank [●] Cash Manager [●] Servicer [●] Special Servicer [●] Swap Counterparty [●] Liquidity Facility Provider [●] Registrar [●] Corporate Services Provider [●] [Listing Agent] [●] Listing Authority [●] Stock Exchange [●] [Rating Agencies] [●] Euroclear Euroclear Bank SA Clearstream Clearstream Banking, societe anonyme Common Depositary [●] Auditor [●] Valuer [●] Issuer's Counsel...

Director’s certificate for a bilateral loan: borrower

Director’s certificate for a bilateral loan: borrower [insert date] To: [insert full name and address of lender] Dear [insert full name of lender] I am a director of [insert full name of borrower] (the Borrower). I refer to the facility agreement dated [insert date of facility agreement] between the Borrower and [insert name of lender] (the Lender) as amended, novated, supplemented, restated or replaced from time to time in accordance with its terms (the Facility Agreement). Unless defined otherwise in this certificate, or the context requires otherwise, all words or expressions defined in the Facility Agreement have the same meaning in this certificate. I am authorised by the Borrower to give this certificate. I certify as follows: Relevant documents Attached to this certificate are copies of each of the following: 1 [the constitutional documents of the Borrower; 2 [the PSC Register of the Borrower, which is correct, complete and not amended or superseded as at a date no earlier than the date of the Facility...

Dive into our 29 Precedents related to Conditions precedent

Do I have time to serve an effective break notice, what form should it take and what is the method of service?

Do I have time to serve an effective break notice, what form should it take and what is the method of service? Scenario A client has just called to tell me that after some last minute management meetings, they would like to give notice urgently to end the lease of their HQ. The break clause states the following: ‘If the Tenant wishes to determine this Lease on the fifth anniversary of commencement of the Term and gives to the Landlord at least 6 months' prior written notice of that wish, then on expiry of the notice the Term is to cease and determine immediately, but without prejudice to any rights or remedies that may have accrued’ The Term commenced on 1 March 2009. It’s 2.30pm on Friday, 30 August 2013. Can I still serve notice effectively and what should I put in my notice? Timing • Determine what is the fifth anniversary of the Term. If the Term commenced ‘on’ (rather than ‘from’ 1 March 2009),...

What procedural steps must a claimant take when issuing a personal injury claim in the High Court in which the Motor Insurance Bureau (MIB) is a defendant under the MIB Uninsured Drivers Scheme?

What procedural steps must a claimant take when issuing a personal injury claim in the High Court in which the Motor Insurance Bureau (MIB) is a defendant under the MIB Uninsured Drivers Scheme? The MIB Uninsured Agreement 2015, which applies to accidents that have occurred on or after 1 August 2015, has less obligations and conditions than previous uninsured agreements. For more information, see Practice Note: Motor Insurers' Bureau (MIB)—2015 Uninsured Agreement. The MIB incurs no liability unless they are joined at the outset as an additional defendant to the proceedings, except when the claimant ‘initially and reasonably believes’ the uninsured driver was covered by a contract of insurance with an insurer whose identity can be ascertained. As noted in clause 13 of the MIB Uninsured Agreement 2015: ‘…13. (1) Subject to paragraph (2), MIB incurs no liability under the MIB’s obligations unless MIB is joined from the outset as an additional Defendant to the relevant proceedings. (2) In the case of a relevant liability which the claimant initially...

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Construction weekly highlights—8 May 2025

This week's edition of Construction weekly highlights includes a case where the Court of Appeal upheld a Technology and Construction Court (TCC) decision affirming that the appellant’s entitlement to levy delay damages was subject to a condition precedent (DBS v Tata), a case where the TCC considered inadvertent disclosure and the applicable principles to decide whether or not permission could be given to use those documents in the proceedings (The New Lottery Company v The Gambling Commission), CIOB’s response to the Government’s reaction to the Grenfell Tower Inquiry Phase 2 Report, publication of the Ministry of Housing, Communities and Local Government (MHCLG)’s impact assessment on the Planning and Infrastructure Bill (Bill) as well as the Royal Institute of British Architects (RIBA)’s recommendations for the Bill, and publication of the Royal Institution of Chartered Surveyors (RICS)’s UK Construction Monitor for Q1 2025.

Court of Appeal considers the interpretation of condition precedent clauses in Disclosure and Barring Service v Tata Consultancy Services Ltd

Commercial analysis: The Court of Appeal recently upheld an important ruling on contractual interpretation, dismissing the Disclosure and Barring Service’s (DBS) appeal against Tata Consultancy Services Ltd (TCS) in a dispute over a £1.6m liquidated damages claim. Victoria Peckett, partner at Clyde & Co, analyses the implication of the court’s decision.

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