Collateral Quality Tests, Minimum Equity Test Clause Samples
The Collateral Quality Tests and Minimum Equity Test clause establishes standards to ensure that the assets or collateral backing a financial transaction meet specified quality criteria and that a minimum level of equity is maintained. In practice, this clause may require that the collateral consists of assets with certain credit ratings or characteristics, and that the equity invested by the sponsor or originator does not fall below a set threshold. By enforcing these requirements, the clause helps maintain the integrity and creditworthiness of the transaction, protecting investors from excessive risk and ensuring ongoing compliance with agreed-upon financial standards.
Collateral Quality Tests, Minimum Equity Test. The Collateral Agent and the Administrative Agent shall have received an Officer’s Certificate (which may be included as part of the Advance Request or Reinvestment Request) computed as of the date of such requested Advance and after giving effect thereto and to the purchase by the Borrower of the Collateral Obligations to be purchased by it on such Funding Date, demonstrating that (i) with respect to each Advance, all of the Collateral Quality Tests and the Minimum Equity Test are satisfied or (ii) with respect to each Reinvestment, each Collateral Quality Test is satisfied (or, if any Collateral Quality Test is not satisfied, it is improved or maintained);
Collateral Quality Tests, Minimum Equity Test. The Collateral Agent and the Facility Agent shall have received an Officer’s Certificate (which may be included as part of the Advance Request or Reinvestment Request) computed as of the proposed Funding Date and after giving effect thereto and to the purchase by the Borrower of the Collateral Obligations to be purchased by it on such Funding Date, demonstrating that all of the Collateral Quality Tests and the Minimum Equity Test are satisfied;
Collateral Quality Tests, Minimum Equity Test. The Collateral Agent, each Agent and the Facility Agent shall have received an Officer’s Certificate (which may be included as part of the Advance Request or Reinvestment Request) computed as of the proposed Funding Date and after giving effect thereto and to the purchase by the Borrower of the Collateral Obligations to be purchased by it on such Funding Date, demonstrating that (i) with respect to each Advance, all of the Collateral Quality Tests and the Minimum Equity Test are satisfied, or (ii) with respect to each Reinvestment, (A) the Diversity Score is at least 10 and (B) each other Collateral Quality Test is satisfied or, if not satisfied, maintained or improved, and the Minimum Equity Test is satisfied.