Restricted Payments | Practical Law

Restricted Payments | Practical Law

Restricted Payments

Restricted Payments

Practical Law Glossary Item 5-382-3766 (Approx. 2 pages)

Glossary

Restricted Payments

A term defined in bank loan agreements and other debt agreements that typically includes payments of dividends, repurchases, and redemptions of equity interests and distributions to equity holders. Loan agreements usually contain a negative covenant that prohibits the borrower from making restricted payments except for a specified list of permitted exceptions.