MFN clause

MFN clause
USA
This term has a number of meanings. In the context of:
• Finance, business jargon for the concept that the first party will be entitled to at least as favorable terms as a second party in specified circumstances. For example, an incremental loan provision may have an "MFN clause" that says that the interest rate on the existing term loan will be increased so that it is not less than 25 basis points lower than the interest rate on the incremental 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.
• Corporate, a contractual provision that enables one party to receive the most favorable price or terms and conditions offered by the other party. This provision acts as a guaranty to the recipient that it is receiving and will continue to receive the best terms offered by the other party.

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

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Look at other dictionaries:

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