Blocker provisions

Contractual provisions that restrict defined transactions or financing maneuvers. Some acquire deal-based nicknames, but their effect depends on the actual wording and exceptions.

Blocker provisions in practice

Hypothetical: assume a credit agreement prohibits transferring a specified material subsidiary to an unrestricted entity and no exception applies. That clause restricts the proposed transfer. A different provision may cover different assets, thresholds or transactions.

Examples of transactions provisions may restrict
  • asset drop-downs
  • guarantee releases
  • uptiers
  • double-dips

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