market disruption clause

market disruption clause
European Union
A clause in a facility agreement (or certain other debt documentation) which allows the lenders, in certain circumstances, to calculate interest on a different basis to that on which it is normally calculated. Usually, the clause is drafted so that it operates if:
• The relevant interbank rate (such as LIBOR or EURIBOR) cannot be established (from either the rate published on a computer screen by a price source vendor such as Reuters or the specified reference banks); or
• A given percentage of lenders can only obtain matching funding in the interbank market at a rate which is higher than the relevant interbank rate.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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