What is MFN debt?

To protect the current term lenders from significantly higher priced incremental debt, most favored nation (MFN) provisions customarily apply for pari passu incremental term loans so that only a limited increase in pricing (conventionally 50 basis points however increasingly borrowers are seeking a 75 basis point …

What does MFN mean in contract?

A most-favored-nation (MFN) clause requires a country to provide any concessions, privileges, or immunities granted to one nation in a trade agreement to all other World Trade Organization member countries. Although its name implies favoritism toward another nation, it denotes the equal treatment of all countries.

What does MFN basis mean?

Most Favored Nations
MFN stands for Most Favored Nations. Most Favored Nations, in the context of music, has nothing to do with the Olympics, Independence Day, or international travel. Within the music ecosystem, it means getting the same treatment as others. The following are some examples of scenarios in which MFN might be helpful.

What is MFN in private equity?

(Private Equity Fund) This Most Favored Nation (MFN) clause for private equity fund (PEF) side letter is to be used when an investor requests written assurance that it will have the same rights as some or all of the other investors in the PEF.

What is MFN in leveraged finance?

While many borrowers take advantage of this opportunity, there are numerous factors to consider before doing so – particularly regarding the so-called Most Favored Nation (“MFN”) provisions applicable to incremental credit facilities.

What does MFN mean in acting?

Film, television, performing arts, theater, gaming, webisode and other contracts that involve live or filmed performance differ in many ways. However, one term that can crop up in any of these contracts is “Most Favored Nations,” or MFN.

Why is MFN important?

MFN status is critically important for smaller and developing countries for several reasons: It gives them access to the larger market. It lowers the cost of their exports since it lowers trade barriers as much as possible.

What is MFN in leveraged Finance?

What does MFN mean in production?

However, one term that can crop up in any of these contracts is “Most Favored Nations,” or MFN. An MFN clause or rider can substantially effect what performers or other designated artists are paid, which is why both producers and artists need to understand the meaning of MFN. MFN clauses are not limited to actors.

What is the difference between MFN and national treatment?

The national treatment clause forbids discrimination between a Member’s own national and also the nationals of the Members. The Most-Favoured-Nation treatment clause forbids discrimination among the nationals of Members.

What is an MFN process?

The MFN process allows investors to elect – and sometimes review – the terms of other investors’ side letters. The inclusion of an MFN provision, in either an investor’s side letter or the fund’s constitutional document, should be carefully considered by both investors and sponsors alike.

What is the most favored nation trading status?

Most Favoured Nation status is given to an international trade partner to ensure non-discriminatory trade between all partner countries of the WTO. In a nutshell, MFN is a non-discriminatory trade policy as it ensures equal trading among all WTO member nations rather than exclusive trading privileges.

What are some of the most common MFN provisions?

Some of the most common include: MFN Cushion Size: Typically, MFN provisions are only triggered if the all-in yield of the newly issued tranche of indebtedness exceeds the all-in yield of the existing indebtedness by more than 50 basis points. In recent deals, some sponsors have increased the cushion from 50 basis points to 75 basis points.

What is a mfmfn clause in a loan?

MFN clauses are sometimes seen between two loan agreements where the first agreement will be entitled to the same or better covenants than the second agreement, so any favorable changes to the second agreement will be deemed to be made to the first agreement as well.

Why do lenders ask borrowers to provide MFN pricing protection?

In exchange for the increased flexibility to incur additional indebtedness, borrowers are commonly asked to provide lenders with MFN pricing protection.

How do MFN provisions affect an incremental credit facility?

The MFN provisions contained in a borrower’s existing credit documentation can significantly affect the viability of accessing an incremental credit facility to finance add-on acquisitions.