Mandatory Prepayments Due to Changes in Exchange Rates Sample Clauses

The "Mandatory Prepayments due to Changes in Exchange Rates" clause requires a borrower to make early repayments on a loan if fluctuations in currency exchange rates cause the outstanding loan amount, when converted to the base currency, to exceed agreed limits. Typically, this applies to multi-currency loan facilities where the value of the loan in the lender's reporting currency may increase due to adverse exchange rate movements. By enforcing prepayments in such scenarios, the clause ensures that the lender's risk exposure remains within acceptable bounds and prevents the borrower from unintentionally breaching financial covenants due to currency volatility.