Collateral Rig Leverage Ratio Clause Samples
The Collateral Rig Leverage Ratio clause defines the required proportion between the value of collateral provided and the amount of leverage or credit extended in a transaction involving rigs or similar equipment. In practice, this clause sets a minimum ratio that must be maintained, ensuring that the lender or counterparty is adequately secured by the collateral relative to the outstanding loan or exposure. For example, if a party borrows funds to finance a drilling rig, the value of the rig pledged as collateral must meet or exceed a specified percentage of the loan amount. The core function of this clause is to mitigate credit risk by ensuring sufficient collateral coverage, thereby protecting the lender in case of default or depreciation of the rig's value.
Collateral Rig Leverage Ratio. The Company will not permit the Collateral Rig Leverage Ratio as of the last day of any fiscal quarter of Holdings ending during the periods specified below to exceed the corresponding ratio set forth below:
Collateral Rig Leverage Ratio. The Company will not permit the Collateral Rig Leverage Ratio as of the last day of any fiscal quarter of Holdings ending during the periods specified below to exceed the corresponding ratio set forth below: After the Issue Date through September 30, 2018 5.75:1.00 On October 1, 2018 through September 30, 2020 4.75:1.00 On October 1, 2020 through September 30, 2022 3.50:1.00 Thereafter 2.50:1.00 Neither the Trustee nor the Collateral Agent shall be obligated to monitor or confirm, on a continuing basis or otherwise, the Company’s compliance with this Section 4.14 (as to which the Trustee and the Collateral Agent are entitled to rely exclusively on the quarterly compliance certificate delivered by the Company pursuant to Section 4.09(b)).
Collateral Rig Leverage Ratio. After the Issue Date through March 31, 2019 6.00:1.00 On April 1, 2019 through March 31, 2021 4.50:1.00 On April 1, 2021 through March 31, 2023 3.50:1.00 Thereafter 3.00:1.00 Neither the Trustee nor the Collateral Agent shall be obligated to monitor or confirm, on a continuing basis or otherwise, the Company’s compliance with this Section 4.14 (as to which the Trustee and the Collateral Agent are entitled to rely exclusively on the quarterly compliance certificate delivered by the Company pursuant to Section 4.09(b)).
Collateral Rig Leverage Ratio. The Company will not permit the Collateral Rig Leverage Ratio as of the last day of each fiscal period of Holdings specified below to exceed the corresponding ratio set forth below: Fiscal Periods EndingMaximum Collateral Rig Leverage Ratio September 30, 2024 and December 31, 20245.75:1.00 March 31, June 30, September 30 and December 31, 20255.00:1.00 March 31, June 30, September 30 and December 31, 20264.25:1.00 March 31, June 30, September 30 and December 31, 20273.50:1.00 Neither the Trustee nor the Collateral Agent shall be obligated to monitor or confirm, on a continuing basis or otherwise, the Company’s compliance with this Section 4.14 (as to which the Trustee and the Collateral Agent are entitled to rely exclusively on the quarterly compliance certificate delivered by the Company pursuant to Section 4.09(b)).