Private Credit Deep Dives – MFN

In recent months – as credit spreads have continued to widen – sponsors, borrowers and lenders alike have frequently found themselves combing through their loan documents to check the scope of the "MFN" provisions applicable to their debt facilities. "MFN" stands for "most favoured nation", and the term originally emanates from the world of international trade agreements, referring to the principle that trade terms that are offered to certain nations are then required to be offered to others. In the context of lending, the MFN is a form of pricing protection for debt. This deep dive with Daniel Hendon (Partner) and Phil Anscombe (Associate), lawyers in Proskauer's Private Credit Group in London, will explain what the MFN is, what it seeks to achieve, how sponsors have sought to limit its application and how it is viewed and negotiated in the current European market.