How certain can you get?

Certainty of funding is increasingly the focus of attention in leveraged buyouts-the seller wants proof that the buyer has the cash needed to consummate the deal. The past 18 months has seen a convergence between US and European market practice in this regard in leveraged acquisition finance transactions. Unusually, it is the US market which is moving closer to European market norms.

All of the excitement has focused on the conditions to which the availability of finance for leveraged acquisitions is subject. In Europe, it is now customary for LBO borrowers to get 'certain funds' commitments from their banks. Market practice in the US is moving closer to that position. The result is a more equitable alignment of interests between borrowers and financiers.

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