Revolving Credit Facility meaning

In a private equity-backed management or leveraged buyout, the principal documents fall into three main groups: Acquisition documents — these set the terms of the purchase between the seller and the buyer (ie newco) Equity documents — these set the terms of the equity investment and govern the relationship between the investor/s and management Finance documents — these cover the provision of the debt facilities and any related facilities (for example, a revolving credit facility for working capital) Acquisition documents Heads of terms (acquisition) The heads of terms, kept to a short form, provide a high-level summary of the parties’ expectations, shared understanding and agreement on the key terms of the intended acquisition. They are signed at the outset of the deal once the parties have aligned on the principal points and before the investor incurs costs on due diligence and the negotiation of the transaction documents...

Financial services developments FSCS publishes budget update for 2026/27 The Financial Services Compensation Scheme (FSCS) has released a budget update, setting out management expenses of £108m for 2026/27. Within this, £97m covers core expenditure, a 6% drop from the prior year, alongside a further £11m to bolster the FSCS’s existing revolving credit facility (RCF), aimed at improving funding readiness and reinforcing trust in the UK financial services sector. With the extra RCF costs included, the FSCS’s total 2026/27 budget remains aligned with inflation. The Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) are consulting on a 2026/27 Management Expenses Levy Limit of £113m, representing an inflation-only uplift of £4.4m on 2025/26. This also provides for an unlevied contingency reserve of £5m, unchanged from 2025/26. The most recent 2025/26 forecast stays at £108.6m, inclusive of an unlevied reserve of £5m, as set out in January 2025. The FSCS adds that it does not expect to invoice firms for the 2025/26 unlevied reserve under current plans only...

After stepping away from merger talks with low-cost peer Frontier, Spirit proceeded with a Chapter 11 plan that it said would significantly reduce leverage and set it up for long-term success. The carrier trimmed US$795m from its US$3.6bn liabilities, yet emerges into challenging macroeconomic conditions, experts noted. Spirit, which declined to comment on 27 February 2025, will swap US$1.6bn of secured borrowings for US$840m of new five-year exit notes and equity. It will also clear a US$300m revolving credit facility at emergence, replace it with a new US$275m revolver, and secure US$350m in fresh equity. ‘It certainly marks progress for Spirit to have both converted sizeable debt to equity and attracted an equity injection’, bankruptcy lawyer Anthony Sabino of Sabino & Sabino PC told Law360. ‘So, the overarching question is, “Will it suffice?”’ As of the petition date, Spirit held US$2.9bn in secured obligations, according to the disclosure statement. The precise post-confirmation debt figure was not immediately available on 27 February 2025. On the remaining balance after the restructuring, Sabino...

This Practice Note outlines green loans and the principal considerations when preparing a green loan agreement. It centres on the Green Loan Principles (GLP) issued by the Loan Market Association (LMA), the Asia Pacific Loan Market Association (APLMA) and the Loan Syndications and Trading Association (LSTA)... Clarifies the meaning of a green loan Introduces the GLP and the accompanying GLP guidance Sets out the four core components of a green loan under the GLP and summarises the related guidance Condenses GLP and GLP guidance on what qualifies as a green loan, on reviews, and on greenwashing risks Provides sources for precedent wording, including the Loan Market Association draft provisions, plus drafting pointers What is meant by a green loan? Under the GLP, green loans encompass any form of loan instrument and/or contingent facility (for example, bonding lines, guarantee lines or letters of credit) where the proceeds, or an equivalent amount, are applied solely to fund, re-finance or guarantee, in...

Atento UK Limited and Atento Luxco 1 sought approval for two Part 26A restructuring plans (RPs), with a convening hearing in October 2023 and a sanction hearing in November 2023. The principal takeaways are set out below (capitalised terms not defined here have the meanings given in the convening and sanction judgments). This deal debrief sits within our Restructuring plans collection. For a list of deal debriefs from 2020 to the present, see Practice Note: Part 26A restructuring plan deal debriefs. For a detailed review of key metrics from the RPs submitted in 2023, together with commentary from leading figures in the restructuring community, see Practice Note: Market Insights Trend Report—trends in Part 26A restructuring plans in 2023 [Archived]. Name of plan company Atento UK Limited (Atento UK) and Atento Luxco 1 (the Issuer) (together, the Plan Companies) Industry sector Customer relationship management and business process outsourcing service Place of debtor’s incorporation and jurisdictional factors Atento UK — England Atento Luxco...

Acquisition finance transactions In an acquisition finance transaction, beyond the debt—whether constituted by loans or bonds—needed to finance the deal, the borrower group will commonly require additional banking facilities. These might include, for example, an overdraft, a stand-by letter of credit facility or a foreign exchange facility, and can frequently all be delivered under the umbrella of a revolving credit facility (RCF) in the senior facilities agreement (SFA). The RCF will usually be capable of being drawn in three distinct ways: in cash (by way of revolving loans) as syndicated, non-cash facilities, eg letters of credit—these will be identified in the documentation; and in the form of bilateral lines known as ancillary facilities Unlike a revolving credit facility drawn in cash, ancillary facilities are not typically of a kind that lends itself to division amongst several lenders, so the documentation caters for their provision on a bilateral basis. For more on the revolving credit facility, in particular how revolving loans...

[ To be printed on the headed paper of the lender’s lawyers ] To: [ insert name and address of Lender ] [ insert date ] Dear [ insert name of Lender ] [ Matter name/reference ] We have served as English law counsel to [ insert name of lender ] (the Lender) in relation to the provision of finance to [ insert name of borrower, company number and registered office ] (the Borrower) comprising a [ term loan and revolving credit facility ] [ describe facilities ] of £[ insert amount ] (the Transaction), and to the negotiation, drafting, execution and completion of the documents specified in Schedule 1 (Documents examined), Paragraph 1 (Opinion Document) (the Opinion Document). We deliver this opinion letter to you, the Lender, pursuant to [ Schedule 2 ] (Conditions Precedent) of the facility agreement between the Lender and the Borrower dated [ insert date ] (the Facility Agreement). Capitalised terms used in this opinion letter but not defined in...

[ To be printed on the headed paper of the lender’s lawyers ] To: [ insert name and address of Lender ] [ insert date ] Dear [ insert name of Lender ] [ Matter name/reference ] We have acted as English law legal adviser to [ insert name of lender ] (the Lender) in relation to financing made available to [ insert name of borrower, company number and registered office ] (the Borrower), comprising a secured [ and guaranteed ] [ term loan and revolving credit facility ] [ describe facilities ] of £ [ insert amount ] (the Transaction). Our engagement has included the negotiation, drafting, execution and finalisation of the documents identified in Schedule 1 (Documents examined), Paragraph 1 (Opinion Documents) (the Opinion Documents). This opinion letter is delivered to you, the Lender, pursuant to [ Schedule 2 ] (Conditions precedent) of the facility agreement between the Lender and the Borrower, [ and Obligors ], dated [ insert...