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Securities Demand
Practical Law Glossary Item 7-382-3807 (Approx. 2 pages)
Glossary
Securities Demand
Business jargon for a provision in bank loan fee letters for bank/bond deals that permits the arranger to demand that the borrower issue debt securities to refinance the outstanding bridge loan arranged by the arranger. The provision may:
- Include limits on the time period in which the arranger can make the demand (typically within the first year).
- Provide a grace period before the demand can be made (typically up to the first six months).
- Cap the interest rate on the debt securities (so that the borrower does not have to issue debt securities at a higher interest rate).
- Provide for various types of debt instruments and structures that can be required by the arranger.
For further information see Practice Note, Fee Letters Overview: Lending.