...or reinstate or else, (due to the absence of a request from the Borrowers),

English translation: question of getting the parsing right

14:46 Feb 6, 2018

English language (monolingual) [PRO]
Bus/Financial - Law: Contract(s) / Term loan agreement

English term or phrase: ...or reinstate or else, (due to the absence of a request from the Borrowers),

The general context is a term loan agreement and, more particularly, cases of Mandatory Prepayment (by the Borrowers) of the term loan facility.

As you may know, term loans are usually granted to businesses for the financing of equipment, real estate or working capital.

One of the cases of mandatory prepayment in this loan agreement is indemnification for insured property damage losses received by the Borrowers (i.e. certain amount of the insurance compensation must be allocated to the prepayment of the loan).

My question: it is unclear to me what is meant by "OR ELSE" followed by "(DUE TO THE ABSENCE OF A REQUEST FROM THE BORROWERS)" in the sentence below. I have capitalized the 'bits' whose meaning I am unsure about.

If the amount of the indemnification received under the Insurance Agreements for property damage losses is equal to or exceeds EURO XXX XXX, Borrowers shall request the authorisation of the Lenders to carry out any replacement or reinstatement of the damaged assets. In this sense, if upon a Majority Lenders decision the Lenders deny their authorisation to the request of the Borrowers to replace or reinstate OR ELSE, (DUE TO THE ABSENCE OF A REQUEST FROM THE BORROWERS), the Borrowers shall be obliged to make a prepayment of the Term Loan Facility for the entire amount of the indemnification...

What does "OR ELSE" mean, in conjunction with "DUE TO THE ABSENCE OF A REQUEST..."?
Is it possible that "OR ELSE" refers to "or for any other reason Borrowers have not received the Lenders' authorization", and, correspondingly, "DUE TO THE ABSENCE OF A REQUEST FROM THE BORROWERS," is an specification of a reason why Borrowers may lack such mandatory authorization, i.e. because they did not request it in the first place?

Many thanks in advance for your help!

Rebeca Martín Lorenzo KudoZ activity Questions: 65 (3 open) (4 without valid answers) (2 closed without grading) Answers: 95 Spain
Local time: 10:35

Selected answer:question of getting the parsing right

Explanation:
If the amount of the indemnification received under the Insurance Agreements for property damage losses is equal to or exceeds EURO XXX XXX, Borrowers shall request the authorisation of the Lenders to carry out any replacement or reinstatement of the damaged assets.

In this sense,
if

[case A]

upon a Majority Lenders decision
the Lenders deny their authorisation to
the request of the Borrowers to replace or reinstate

OR ELSE,

[case B]

(DUE TO THE ABSENCE OF A REQUEST FROM THE BORROWERS),

the Borrowers shall be obliged to make a prepayment of the Term Loan Facility for the entire amount of the indemnification...

IOW
"or reinstate" is part of one fragment of this sentence, and then
"or else" is the link with the next fragment of this sentence,
where these two fragments describe two cases when the "indemnification" has to passed to the Lenders.

REPHRASED FOR CLARITY:

IF

[case A] occurred:

by "a Majority of Lenders" Lenders decide to
deny their authorisation to
the request of the Borrowers to replace or reinstate
(the previously mentioned "replacement or reinstatement of the damaged assets.")

OR IF

[case B] occurred:

the Borrowers didn't made a all a request
to use the insurance money ("the amount of the indemnification")
to replace or reinstate the damaged assets."

THEN

the Borrowers shall be obliged to make a prepayment of the Term Loan Facility for the entire amount of the indemnification
(=all of the received "indemnification" should be passed to the Lenders in the form of "a prepayment of the Term Loan Facility")

--------------------------------------------------
Note added at 1 hr (2018-02-06 15:49:02 GMT)
--------------------------------------------------

... has to be passed to the Lenders.

Selected response from:

Daryo
United Kingdom
Local time: 09:35

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SUMMARY OF ALL EXPLANATIONS PROVIDED

question of getting the parsing right

Daryo

Discussion entries: 10

Rebeca Martín Lorenzo

Spain

ASKER

@Daryo

11:37 Feb 8, 2018

Correction: Of course in the course of the financing the property still "belongs" to the bank (the lender) ;-)

Rebeca Martín Lorenzo

Spain

ASKER

@Daryo

11:16 Feb 8, 2018

Hello, property is owned by Borrowers (companies probably), the term loan (granted by a bank or banks) is to finance that property o part of it, so Borrowers must have insurance cover in place for such goods. If they are indemnified for damages to that property, then (upon certain conditions and up to certain amounts) Borrowers must make prepayment of the loan.

Have a nice day!

Daryo

United Kingdom

all I can find in the sample you

10:50 Feb 8, 2018

quoted is about some insurance money received by the Borrowers in relation to an insurance claim on a property owned by (or at least for sure "under the control of") the Lenders.

That insurance claim money is not money borrowed from Lenders, so strictly speaking passing that money to the owner of the insured goods/property is technically not quite an ordinary "repayment of the loan".

But anyway, whichever way you split that hairs, that part doesn't change anything to the parsing of the relevant sentence.

Rebeca Martín Lorenzo

Spain

ASKER

@Daryo

09:16 Feb 7, 2018

Yes, it definitely has to do with early repayment of the loan, as I pointed out in my question. Mandatory and/or voluntary prepayment is a common feature of loan agreements, pls see
https://www.out-law.com/topics/financial-services/banking/lo...

However, thanks for rephrasing the fragment in your answer, it's been very useful to me and confirms my intuition and Danya's :-)

Daryo

United Kingdom

Context?

02:41 Feb 7, 2018

Anyone noticed the previous sentence???

If the amount of the indemnification received under the Insurance Agreements for property damage losses is equal to or exceeds EURO XXX XXX, Borrowers shall request the authorisation of the Lenders to carry out any replacement or reinstatement of the damaged assets.

if the NEXT sentence starts with: "In this sense..." you shouldn't need a PhD in linguistics to conclude that the following sentence refers to the same situation, i.e.:

Borrowers have received some "indemnification for suffered property damage losses", on the basis of some "Insurance Agreement", a reasonable assumption being that "Borrowers" are the occupiers of the insured premises [otherwise they wouldn't be able to insure them] but NOT the owners - if they have to ask for authorisation from the Lenders before doing any substantial work, then the Lenders are the owners/landlords of these premises.

IOW it's about deciding what can or can not be done with the "indemnification" received by the Borrowers/Occupiers following an insurance claim related to a property owned by the Lenders - nothing to do with any kind of "early repayment of loan"

danya

re.prepayment

20:40 Feb 6, 2018

this is legit lending jargon for repaying a loan ahead of time
https://en.wikipedia.org/wiki/Prepayment_of_loan

philgoddard

United States

20:36 Feb 6, 2018

I've read this several times, and it makes no sense to me. Is it a translation from another language?
I think we can only guess at the meaning.
In particular, I'm not clear what is meant by prepayment. Early repayment?

Rebeca Martín Lorenzo

Spain

ASKER

@Danya

18:28 Feb 6, 2018

I see, that makes sense to me :-) Many thanks!

danya

15:40 Feb 6, 2018

if the Borrowers a) are denied their request for reinstatement of the damaged assets , or b) have failed to file such request, they will be obliged to make a prepayment

danya

I would read it this way

15:38 Feb 6, 2018

...; OR ELSE (if no request is filed by the Borrowers), the Borrowers etc.

Answers

1 hr confidence:

...or else, (due to the absence of a request from the borrowers),

question of getting the parsing right

Daryo
United Kingdom
Local time: 09:35
Does not meet criteria
Specializes in field
Native speaker of:

Serbian,

French
PRO pts in category: 16

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