Term-Out Option | Practical Law

Term-Out Option | Practical Law

Term-Out Option

Term-Out Option

Practical Law Glossary Item 6-501-2561 (Approx. 2 pages)

Glossary

Term-Out Option

A borrower-friendly provision in a revolving credit facility that allows a borrower to convert the drawn amount of the lenders' commitment into a term loan for a pre-defined period of time and at a specified margin. These provisions are usually used to convert 364-day facilities for a term of an additional year.