Finance

Leveraged Finance Academy: Introduction to Leveraged Finance - 7 March 2023

Shearman & Sterling LLP

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Restricted vs. Unrestricted Subsidiaries 7 All subsidiaries of the Issuer other than Unrestricted Subsidiaries are bound by the covenants Activities of Unrestricted Subsidiaries are not governed by the covenants 01 Unrestricted Subsidiaries are treated as if they are third parties and therefore each transaction with an Unrestricted Subsidiary has to be reviewed for compliance with all applicable covenants 02 Investment in Unrestricted Subsidiaries is limited by the restricted payments covenant 03 Financial tests are computed without giving effect to the results of Unrestricted Subsidiaries so any EBITDA, net income or assets of an unrestricted subsidiary will not count towards the Group's compliance with any applicable financial covenant A subsidiary may only become an Unrestricted Subsidiary by designation of the Board of the Issuer if certain criteria met The Debt Stack – Structuring and Incurrence Covenants

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