yank-a-bank

USA

A clause in a loan agreement which gives the borrower the right to pay-off and replace a single member of the lending syndicate in limited circumstances such as where a lender has requested reimbursement for taxes or increased costs of funding, where a lender has defaulted on its obligation to fund a loan, or where, in connection with an amendment or waiver of the terms of the loan agreement, a lender has dissented in a vote in which the majority of the lenders approved the amendment. Typically the borrower will not pay a prepayment premium but will pay all principal and all accrued interest, fees, costs, expenses and other amounts payable to such lender under the relevant loan agreement.