Corporate
May 11, 2020
Lender’s liability and MAC clauses in the era of COVID-19
To mitigate the unprecedented financial impacts of the COVID-19 pandemic, lenders are reviewing their existing loan portfolios and assessing their obligations to continue funding under loan commitments. Material adverse change clauses provide a potential path to achieve this objective.
Simran S. Bindra
Counsel
Thompson Coburn LLP
Email: sbindra@thompsoncoburn.com
Simran is a member of the firm's Banking and Commercial Finance practice. He has previously served as general counsel and senior director for the commercial and specialty finance group at Capital One, N.A. as well as serving as senior counsel with a publicly traded real estate investment trust.
To mitigate the unprecedented financial impacts of the COVID-19 pandemic, lenders are reviewing their existing loan portfolios and assessing their obligations to continue funding under loan commitments. Material adverse change clauses provide a potential path to achieve this objective. The typical MAC clause in a credit agreement defines a MAC as any material adverse change or effect on the financial conditions, operations or business of the borrower and other credit ...
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