Why UK lenders must toughen up on Macs

Author: Danielle Myles | Published: 11 Jun 2013

Key Takeaways

  • Lenders should negotiate broader Mac clauses in English law governed finance agreements following a recent High Court ruling;
  • The Court took a narrow interpretation of the clause, proving sponsors success in whittling away the breadth and effectiveness of Macs in loan documents;
  • The ruling diminishes gaps between US and European best practice, in that event of default Macs do not feature in US loan documents;
  • It is a rare example of case law on the Macs in a finance or corporate context;
  • Mac negotiations within private M&A will have stronger focus on party awareness.

Lenders should curb the material adverse change (Macs) concessions being granted to borrowers under English law loans, after the High Court’s narrow interpretation in a recent ruling.

The Court’s decision limits the...