- The sukuk issuance includes negative pledge
provision, as well as financial reporting obligations, Senaat event, change of control and cross-default terminology.
The main two supporting factors for this rating are first a security package which provides 100 per cent coverage of the Sukuk issue amount and second a negative pledge
on other real estate assets covering a further 20 per cent of issue value.
The agreement includes standard terms and obligations and also generally includes the negative pledge
, limitations on distributions, financial covenants and event of defaults applicable to the company's series F through I debentures, with certain modifications.
"Our request for a negative pledge
on Ibrox to prevent it being used by anyone else as security was not accepted.
For example, they would restrict the enforceability of covenants, such as a negative pledge
clause, to relatively sophisticated lenders who later make material investments and who would likely screen the debtor for other risk factors such as cash flow, credit record, and asset ownership.
The terms and conditions of the documentation include a change of control clause, a negative pledge
clause and a cross default provision.
The bond includes a negative pledge
provision binding Arcelik, as well as financial reporting obligations, a restriction on certain corporate reorganisations, and a covenant limiting transactions with affiliates that do not comply with an arms-length principle.
Among other standard conditions, the trust certificates benefit from a negative pledge
, a change of control, and a cross-default provision.
This could not be done without permission from the beneficiaries of the negative pledge
, but the bond contracts had no mechanism for that permission to be given short of a unanimous vote of the affected bondholders, which was impossible to obtain as a practical matter.
The arrangement is subject to a negative pledge
, by which DCD is not entitled to create any encumbrances such as a mortgage on the security assets without getting the prior consent of the bank.