Common use of Hedging Clause in Contracts

Hedging. If, as of any Monthly Reporting Date, the average of the Excess Spread Ratios for the three preceding Accounting Periods is less than 7.00%, the Borrower shall purchase, or cause the Servicer to purchase, an Interest Rate Hedge Agreement which shall provide suitable protection (in the Program Agent’s reasonable judgment) against an adverse change in interest rates. If the Borrower fails to purchase an Interest Rate Hedge Agreement that adequately protects the Lenders, the Program Agent may reduce the Advance Rate to compensate for the potential reduction in the Excess Spread Ratio and continued exposure to additional interest rate risk.

Hedging. If, as of any Monthly Reporting Date, the average of the Excess Spread Ratios for the three preceding Accounting Periods is less than 7.00%, the Borrower shall purchase, or cause the Servicer to purchase, an Interest Rate Hedge Agreement which shall provide suitable protection (in the Program Agent’s reasonable judgment) against an adverse change in interest ratesrates with respect to at least 95% of the Outstanding Loan Amount. If the Borrower fails to purchase an Interest Rate Hedge Agreement that adequately protects the Lenders, the Program Agent may reduce increase the Advance Rate Reserve Percentage to compensate for the potential reduction in the Excess Spread Ratio and continued exposure to additional interest rate risk.