Funding Into a Pandemic: COVID-19 MAE and Credit Agreements

As the financial impact of the COVID-19 pandemic is felt by the global economy, businesses and capital providers are taking a close look at their credit agreements to ascertain what implications the crisis may have on compliance and their ability to access (or limit access to) additional funds in the near to medium term. Specifically, borrowers and their lenders must closely review funding conditions and representations relating to solvency, pro forma covenant compliance, and material adverse effect to determine whether the impact of COVID-19 constitutes a Material Adverse Effect/Material Adverse Change (MAE) or presents other obstacles to accessing funds under their existing debt instruments.

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