An Accordion feature is an agreed possibility included at the outset of a financing process allowing the borrower to increase the principal amount under the main facility agreement (e.g. a capex facility) as long as certain market standard provisions are met. It is worth noting that an Accordion feature is not a committed facility by the lenders, but is at their sole discretion.
Regularly, drawings under such Accordion feature are subject to the following provisions:
- no default
- no repayment before the final maturity of the main facility agreement
- margin with a max. percentage up-tick over the main facility margin
- ranking pari passu or junior to the main facility
- main facility to be fully drawn