Optional Interest Deferral Clause Samples
The Optional Interest Deferral clause allows a borrower or issuer to postpone the payment of interest that would otherwise be due on a specified date. In practice, this means that instead of making scheduled interest payments, the party can elect to defer them to a later date, often subject to certain conditions or limitations, such as a maximum deferral period or notification requirements. This clause is commonly used in debt instruments or structured finance to provide flexibility in managing cash flow, especially during periods of financial stress, thereby helping the borrower avoid default while maintaining the overall structure of the agreement.
POPULAR SAMPLE Copied 4 times
Optional Interest Deferral. The Issuer may, at its sole discretion, elect to defer in whole (or in part) any payment of interest accrued on the Securities in respect of any Interest Period by giving notice of such election to the Securityholders in accordance with Condition 14 and to the Fiscal Agent and Paying Agents at least ten, but not more than 30, Business Days prior to the relevant Interest Payment Date. If the Issuer makes such an election, the Issuer shall have no obligation to make such payment and any such non-payment of interest shall not constitute a default of the Issuer or any other breach of obligations under the Securities or for any other purpose, unless such Arrears of Interest becomes due and payable in accordance with these Conditions. Any such interest which the Issuer duly elects to defer shall constitute “Arrears of Interest”. Any Arrears of Interest will remain outstanding until paid in full by the Issuer, but Arrears of Interest shall not themselves bear interest.
Optional Interest Deferral. Interest which accrues during an Interest Period will be due and payable on the relevant Interest Payment Date, unless the Issuer elects, in its sole discretion, to defer the relevant payment of interest (in whole or in part). The Issuer may, at its discretion, elect to defer any payment of interest (in whole or in part) which is otherwise scheduled to be paid on an Interest Payment Date; provided that any such deferred interest shall become due and payable on the date the Issuer declares any distributions on any of the Issuer’s common shares or preferred shares. If the Issuer elects not to make all or part of any payment of interest on an Interest Payment Date, then neither the Issuer nor any Guarantor will have any obligation to pay such interest on the relevant Interest Payment Date. Deferred interest will accrue, compounding on each subsequent Interest Payment Date, until paid. Such deferral will not constitute an Event of Default or any other breach under the Indenture, the Notes and the Guarantees. First Call Date: April 30, 2026
Optional Interest Deferral. The Company has the right on one or more occasions to defer the payment of interest on the Notes for up to five consecutive years (each such period, an “optional deferral period”). During an optional deferral period, interest will continue to accrue on the Notes, and Deferred Interest payments will accrue additional interest at the then applicable interest rate on the Notes, compounded semi-annually as of each Interest Payment Date to the extent permitted by applicable law. If the Company has exercised its right to defer interest payments on the Notes, neither the Company nor any Guarantor may generally make payments on or redeem or purchase any of its equity interests or any of its debt securities or guarantees that rank pari passu or junior to the Notes, subject to exceptions as set forth in the Indenture.
Optional Interest Deferral. Interest which accrues during an Interest Period ending on but excluding an Interest Payment Date will be due and payable on that Interest Payment Date unless the Company, by notice to (a) the Holders in accordance with Section 10.1 of the Indenture and (b) the Trustee and Paying Agent at least seven Business Days prior to the relevant Interest Payment Date, elects to defer payment, from time to time, in whole or in part, of the interest accrued on the Notes in respect of any Interest Period. If the Company makes such election, interest will continue to accrue, however, the Company shall have no obligation to make such payment and any failure to pay shall not constitute a default by the Company or any other breach of obligations under the Notes or for any other purpose.
Optional Interest Deferral. So long as no event of default (as defined in the Preliminary Prospectus Supplement) with respect to the Notes has occurred and is continuing, NiSource may, at its option, defer interest payments on the Notes, from time to time, for one or more Optional Deferral Periods (as defined in the Preliminary Prospectus Supplement) of up to [ ] consecutive semi-annual Interest Payment Periods (as defined in the Preliminary Prospectus Supplement) each, except that no such Optional Deferral Period may extend beyond the final maturity date of the Notes or end on a day other than the day immediately preceding an interest payment date. During any Optional Deferral Period, interest on the Notes will continue to accrue at the then-applicable interest rate on the Notes (as reset from time to time on any Reset Date occurring during such Optional Deferral Period in accordance with the terms of the Notes). In addition, during any Optional Deferral Period, interest on the deferred interest (“compound interest”) will accrue at the then-applicable interest rate on the Notes (as reset from time to time on any Reset Date occurring during such Optional Deferral Period in accordance with the terms of the Notes), compounded semi-annually, to the extent permitted by applicable
Optional Interest Deferral. Deferral of Interest Payments) shall not constitute a default by the Issuer under the Notes or for any other purpose.
Optional Interest Deferral. On any Interest Payment Date other than a Compulsory Interest Payment Date or a Mandatory Interest Deferral Date (an Optional Interest Payment Date), the Issuer may, at its option, elect, by giving notice to the Noteholders pursuant to Condition 4.2(d) below, to defer payment of all (but not some only) of the interest accrued to that Interest Payment Date. If the Issuer makes such an election, the Issuer shall have no obligation to make such payment and any such non-payment of interest shall not constitute a default of the Issuer or any other breach of obligations under the Notes or for any other purpose. Pursuant to this Condition 4.2(a) (but without prejudice to any other provision of these Conditions), the Issuer may defer payment of interest on each Optional Interest Payment Date but may not defer interest in respect of an Interest Period ending immediately prior to the Maturity Date or any date on which the Notes are redeemed in full pursuant to these Conditions.
Optional Interest Deferral