Cash sweep meaning

This glossary sets out many of the expressions commonly used in the leveraged finance market. Words appearing in the definitions in bold are defined elsewhere in this glossary. For further banking terminology, please refer to the main Banking & Finance Glossary... Acquisition finance glossary—A Acceleration Acceleration is the formal action taken by the agent, on the instructions of the majority lenders, following an event of default, such as making a demand for early repayment of the loan. See Practice Note: Accelerating a loan for more information... Accordion feature/accordion facility An accordion, also called an incremental debt feature, is a mechanism in the facilities agreement that, provided specified conditions are satisfied (for example, pro forma compliance with a leverage test), permits those lenders under the facilities agreement who wish to do so to advance additional debt. The terms for that extra debt are typically captured in an increase notice. This accordion or incremental debt flexibility is different from structural adjustment, which usually requires the majority consent...

Banking & Finance glossary A Auditing and Accounting Organisation for Islamic Financial Institutions (AAOIFI) The foremost Islamic, international, autonomous, independent, not-for-profit corporate body that develops and issues accounting, auditing, governance, ethics and Shari’ah benchmarks and standards for Islamic Financial Institutions (IFIs) and the wider Islamic finance sector. Founded in Bahrain in 1991, it is backed by a number of institutional members across more than 45 countries, including central banks and regulatory authorities, financial institutions, accounting and auditing practices, and legal firms. Its pronouncements are currently applied by leading Islamic financial institutions across the world and have advanced a progressive and gradual harmonisation of global Islamic finance practice. It also delivers professional qualification programmes—notably Certified Islamic Professional Accountant (CIPA), Certified Shari’ah Adviser and Auditor (CSAA), and the corporate compliance programme—in efforts to strengthen the industry’s human capital and governance frameworks. For further details, see Practice Note: Key participants in the Islamic finance industry—Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). Acceleration Acceleration is the formal action...

Financial covenants For lenders in project finance, closely gauging a project's financial robustness is essential. In a standard project finance deal, the project typically provides the borrower’s sole revenue stream to service the debt (see Practice Note: Introduction to project finance—Concept of project finance). Undertakings (often called 'covenants') are commitments the borrower—sometimes together with members of its group—gives to the lender about doing, or refraining from, specified actions and behaviours. For further information on undertakings in general, see Practice Note: Undertakings (covenants). Financial covenants represent a distinct subset within those undertakings. They also require the borrower to meet, or comply with, specific financial thresholds. These financial covenants appear across a wide range of commercial finance arrangements (for broader guidance on financial covenants, including details of relevant provisions in Loan Market Association documentation and on accounting principles, including International Financial Reporting Standards (IFRS), see Practice Note: Introductory guide to financial covenants)...