Collateral Maintenance Ratio Clause Samples
The Collateral Maintenance Ratio clause defines the minimum value of collateral that must be maintained relative to the outstanding obligations in a financial agreement. Typically, this clause requires the borrower to ensure that the value of pledged assets, such as securities or cash, does not fall below a specified percentage of the loan amount. If the ratio drops below the required threshold, the borrower may be required to provide additional collateral or face default. This clause serves to protect the lender by ensuring there is always sufficient collateral to cover potential losses, thereby mitigating credit risk.
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Collateral Maintenance Ratio. (a) If, at any time, the aggregate Fair Market Value of the Ships shall be less than 135% of the unpaid principal amount of the Loan (the “Collateral Maintenance Ratio”), the Facility Agent shall have the right to require the Borrowers, within 30 Business Days of the date of the written demand of the Facility Agent, to either (x) prepay the Loan in such amount as may be necessary to cause such aggregate Fair Market Value of the Ships to equal or exceed 135% of the unpaid principal amount of the Loan or (y) provide such additional Collateral as may be acceptable to the Facility Agent in its sole reasonable discretion so that aggregate Fair Market Value of the Ships and such additional Collateral equals or exceeds 135% of the unpaid principal amount of the Loan, and the Borrowers hereby agree to comply with any such written demand made by the Facility Agent.
(b) Any prepayment made pursuant to this Clause 10.3 shall be applied to the remaining repayment installments of principal and interest in inverse order of maturity, may not be re-borrowed, and shall be subject to the requirements of Clause 7.8, provided that any prepayment made pursuant to this Clause 10.3 shall not be subject to a prepayment penalty under Clause 7.8(c).
Collateral Maintenance Ratio. If, at any time, the Agent notifies the Borrower that:
(a) the aggregate Fair Market Value of the Vessels subject to a Mortgage and not the subject of a Total Loss; plus
(b) the net realizable value of any additional Collateral previously provided under this Clause 15, is below 145% of the Loans outstanding (such ratio being the “Collateral Maintenance Ratio”), the Agent (acting upon the instruction of the Majority Lenders) shall have the right to require the Borrower to comply with the requirements of Clause 15.3.
Collateral Maintenance Ratio. If, at any time, the Agent notifies the Borrowers that the aggregate Fair Market Value of the Ships plus the net realizable value of any additional Collateral previously provided under this Clause 15 is below:
Collateral Maintenance Ratio. If, at any time, the Agent notifies the Borrowers that the aggregate Fair Market Value of the Ships plus the net realizable value of any additional Collateral previously provided under this Clause 15 is below:
(a) with respect to NORDIC ODYSSEY and NORDIC ORION, 154% of the Loan between the Effective Date and the Drawdown Date with respect to the Advance relating to NORDIC OSHIMA;
(b) with respect to the Ships in the aggregate,
(i) 143% of the Loan between the Drawdown Date with respect to the Advance relating to NORDIC OSHIMA and December 31, 2015; and
(ii) 167% of the Loan thereafter; and (such ratio being the “Collateral Maintenance Ratio”), then the Agent (acting upon the instruction of the Majority Lenders) shall have the right to require the Borrowers to comply with the requirements of Clause 15.3.
Collateral Maintenance Ratio. If, at any time the Lender notifies the Borrowers that the aggregate Fair Market Value of the Vessels is below 125% of the outstanding principal balance of the Loan (such ratio being the “Collateral Maintenance Ratio”), the Lender shall have the right to require the Borrowers to prepay (without payment of any Prepayment Fee) such part of the Loan as will eliminate the shortfall on or before the date falling one (1) month after the date on which the Lender serves such notice (the “Prepayment Date”). Any such prepayment shall be applied to the Borrowers’ Obligations in the inverse order of maturity.
Collateral Maintenance Ratio. If, at any time, the Agent notifies the Borrower that:
(a) the aggregate Fair Market Value of the Ship; plus
(b) the net realizable value of any additional Collateral previously provided under this Clause 15, is below either (i) 140% of the Loan in the case where the Ship is operating in a pool or on the spot market or (ii) 130% of the Loan in the case where the Ship is subject to a Charter (such ratio being the “Collateral Maintenance Ratio”), the Agent (acting upon the instruction of the Majority Lenders) shall have the right to require the Borrower to comply with the requirements of Clause 15.3.
Collateral Maintenance Ratio. If the ratio of Aggregate Collateral Vessel Value to total Commitments is less than 2.50:1.00, the Borrower shall, within thirty (30) days of the Facility Agent’s receipt of appraisals evidencing the Fair Market Value of the Collateral Vessels, which period may be extended by the Facility Agent in its reasonable discretion, take one of the following actions: (i) pledge or cause to be pledged to the Security Trustee in a blocked account cash Collateral, (ii) cause Additional Vessels to become Collateral Vessels; and/or (iii) permanently cancel the Commitments and, if applicable, prepay a principal amount of any outstanding Advances (together with interest thereon and any other monies payable in respect of such prepayment pursuant to Section 5.5), in each case in such amounts necessary to cause the ratio of the Aggregate Collateral Vessel Value to the total Commitments to be equal to or exceed 2.50:1.00.
Collateral Maintenance Ratio. (a) If at any time the Owner notifies the Charterer that the ratio of (i) the aggregate of the Fair Market Value (determined pursuant to clause 12.4(m)) of the Vessel and the net realisable value of any additional security provided at any time under this clause 13.18 to
Collateral Maintenance Ratio. The Borrower shall not at any time permit its Collateral Maintenance Ratio (determined on the basis of the most recent Desktop Appraisal required to be delivered by the Borrower under this Agreement) to be less than 1.25 to 1.00.”
Collateral Maintenance Ratio. If, at any time, the aggregate Fair Market Value of the Ships that have been delivered to the Obligors shall be less than the sum of (i) 125% of the aggregate unpaid principal amount of the Advances in respect of such delivered non-Brazilian flagged Ships and (ii) 133.3% of the aggregate unpaid principal amount of the Advances in respect of such delivered Brazilian flagged Ships (such ratio being the “Collateral Maintenance Ratio”), the Facility Agent (acting upon the instruction of the Majority Lenders) shall have the right to require the Borrower, within 30 Business Days of the date of the written demand of the Facility Agent, to either:
(a) prepay the Loan in such amount as may be necessary to cause such Fair Market Value of the Ships to equal or exceed the required Collateral Maintenance Ratio; or
(b) provide such additional Collateral as may be acceptable to the Facility Agent in its sole reasonable discretion (acting upon the instruction of the Majority Lenders) so that Fair Market Value of the Ships and such additional Collateral equals or exceeds the required Collateral Maintenance Ratio, and the Borrower hereby agrees to comply with any such written demand made by the Facility Agent.