What Are Debt Baskets

If limitations are in place for a specific type of debt, or for funds earmarked for particular purposes, the covenant or agreement is known as a debt basket. In more extreme cases, lenders may demand the company not take on additional debt until repayment of their bond is complete.

What is a starter basket credit agreement?

Starter Basket Amount: a starting amount (commonly referred to as a “starter basket amount”) which, unlike the incremental starter amount, is not necessarily based on a percentage of the borrower’s EBITDA but is, instead, generally determined on a case-by-case basis (which amount may be further increased by a grower …

What is a basket in law?

In the context of mergers and acquisitions, or a commercial transaction, a basket is a provision in a purchase and sale agreement that limits an indemnifying party’s obligations to indemnify another party for small losses or claims. The basket establishes a monetary threshold.