Jurisdiction(s):
United Kingdom

Key definition

Market flex definition

What does Market flex mean? In syndicated lending and underwritten leveraged finance, market flex describes a pre‑agreed right for the mandated lead arranger/bookrunner to adjust specified terms of the facilities, without the borrower’s consent, to achieve a successful primary syndication. It is a market term (not defined in legislation or case law) and is typically set out in the commitment papers, most commonly in the confidential fee letter, sometimes in the commitment letter. Flex usually permits changes within stated parameters and caps to: pricing (for example, margin, original issue discount and interest rate floors), fees, tranche sizing and allocation, tenor and amortisation,...

Market Flex in Underwritten Loan Syndications: Pricing, Structural and Terms Flex, Reverse Flex, Decision-making, Timing and LMA Mandate Letter Wording

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Practice notes

What is a 'Market flex' provision?

A market flex clause grants arrangers and underwriters limited leeway to adjust financing terms after the relevant facility agreement has been signed. As they arrange and underwrite the transaction, these provisions help them distribute the debt to the market and cut their exposure to the Borrower to an agreed minimum hold level. Typical wording allows the arrangers or underwriters to alter certain key aspects of the financing to make it more appealing to potential lenders, particularly in more difficult or volatile market conditions. It is usually addressed in the Mandate letter or the arrangement/Underwriting fee letter. For more information on mandate letters, see Practice Note: Mandate letters. For more on the role of arrangers and underwriters in loan transactions, see Practice Note: The finance parties.

When can market flex be used?

These provisions can be used by the arrangers or underwriters before or after the facility documentation is signed.

What can be flexed?...

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Lee Federman

Lee Federman has a wide range of experience across debt finance products and has worked in several key financial jurisdictions (London, New York, Hong Kong, and Amsterdam). He advises bank lenders, alternate credit providers, major financial sponsors, and their portfolio companies on cross-border investment grade and leveraged financings and other event-driven financings.Lee acted on deals involving a number of private equity sponsors active in Europe prior to joining Jones Day in November 2018 including Apax, Apollo, Blackstone, Carlyle, Graphite, KKR, Montagu, Permira, Rutland, and Waterland as well as alternate capital providers including Ares, Crescent, Fortress, Gemcorp, Oppenheimer, Towerbrook, and Tyndaris.Lee is recommended in Legal 500 UK (2016-2018) for acquisition finance and general syndicated lending and described as "knowledgeable, responsive and practical" and praised for his ability to "explain complicated matters in plain English." Lee also worked with Credit Suisse and Lehman Brothers on...

Web page updated on 28/05/2026

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