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Firms ask lenders to modify accelerated payment clause in loan agreements

Bankers said such rules for accelerated payments are in place to protect the interest of lenders

banks, LOANS
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Abhijit Lele Mumbai
Corporates are attempting to renegotiate covenants in loan agreements with lenders as some banks have sought accelerated repayments after multi-notch rating downgrades. Lenders say the covenants give lenders the right for seeking early payments. This actually may push firms into more financial difficulty and increase chances of default. 

Hence, corporates want to renegotiate terms to ease the conditions to tide over the current adverse business environment, said rating agency analysts and corporate advisors.

Bankers said such rules for accelerated payments are in place to protect the interest of lenders. But in practice, very few banks take recourse to such provisions in loan
Topics : Banks loans

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First Published: Nov 28 2019 | 1:59 AM IST

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