(MAC) Material adverse change definition

Material Adverse Change (MAC) is a clause that is commonly included in loan agreements, providing lenders with a degree of protection against significant changes that have or can have a significant effect on the business, assets, and financial condition of the borrower. After the occurrence of a material adverse change event prior to closing of a deal lenders usually reserve the right to adjust the interest rate or other terms of the contract, while for already closed deals lenders may refuse any further drawings and require immediate debt repayment.

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