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United Kingdom
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Forward start facility meaning
Published by a LexisNexis Banking & Finance expert
What does Forward start facility mean?
A forward start facility (FSF) is a committed syndicated loan put in place by some or all of a borrower’s existing lenders to take effect at a future date and refinance, in whole or in part, the current facility at or shortly before its maturity. It is a market term (not defined in legislation or case law) used consistently across England & Wales, Scotland, Northern Ireland and Ireland in corporate lending and leveraged finance.
Key features include:
- Commitment now for funding later, typically agreed 6–24 months before the maturity date.
- Structured as a new tranche under existing LMA-based documentation or as a separate facility, with a deferred availability period.
- Proceeds must be applied to repay the maturing term loan or revolving credit facility.
- Conditions precedent are usually limited (for example, no default, bring-down of representations, fee and security confirmations, intercreditor consents).
- Pricing commonly steps up to reflect the forward commitment; covenants and security package often align with the existing deal.
- May be provided by a subset of the existing syndicate, resulting in split maturities.
An FSF differs from a simple maturity extension (amend-and-extend): it is a new, committed facility that starts in the future, securing refinancing certainty ahead of maturity.
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View the related Practice Notes about Forward start facility
PRACTICE NOTES
UK Banking, Finance, Capital Markets, Derivatives and Insolvency Law Glossary including Islamic finance
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...
22 May
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