In exchange for waiving the Financial Covenant and/or resetting it, most lenders request a new Covenant that requires the borrower to meet a minimum level of liquidity each day of the financial waiver period. For lenders, controlling a borrower`s liquidity ensures that the borrower has sufficient cash to meet the obligations arising from the existing credit agreement. Liquidity is defined as the sum of unlimited liquidity plus unused liabilities under revolving credit facilities. Since EBITDA is not only used by investors to assess a company`s financial performance, borrowers have focused on the fact that, as part of their credit agreements, EBITDA reflects their typical business development, despite the disruptions caused by COVID-19. In most of the changes we have seen, after the end of the financial exchange period, the calculation of EBITDA for the purposes of the Financial Covenant (and, in some cases, for all purposes) will be modified to exclude the impact of the quarters of activity affected by covid-19. The different formulations we have seen are as follows: given the uncertainty and interruption of cash flow due to COVID-19, borrowers have also taken steps to ensure liquidity. In addition to linkages related to existing revolving credit facilities and the implementation of operational liquidity-conserving measures, some borrowers have taken out incremental credit facilities or issued high-yield bonds and, where possible, converted interest in kind (or “PIK”) and/or suspended quarterly amortization payments under their existing credit agreements. Insurance and guarantees. In order to encourage the other parties to adopt this amendment, the borrower declares and warrants to each of the lenders, including tranche 5 Term Lenders, as well as to the administrative agent, that this amendment has been duly approved from the date of entry into force of the amendment and after the entry into force of the transactions and modifications to be made on the date of entry into force of the amendment. In fact, the LCD Daily Playbook (20 years) May 2020) three times more changes to the credit agreement compared to the same period of the previous year. Approval rights and margin increases….