Module deep-dive
Prepayment — ECF sweep
Mandatory repayment from a percentage of Excess Cash Flow each year, with stepdowns at leverage thresholds. The principal source of accelerated paydown in non-distress.
Capacity waterfallFormulaic — upload financials to resolve
Base sweep
50%
Default ECF percentage absent any leverage stepdown.
Stepdown @ 4.0×
−25%
Sweep drops to 25% if SSLR ≤ 4.0× pro forma.
Stepdown @ 3.5×
−25%
Sweep drops to 0% if SSLR ≤ 3.5× pro forma.
Total available
≤ 50% of ECF
Sweep starts at 50% of ECF; steps to 25% at SSLR ≤ 4.0×, then 0% at ≤ 3.5×. Trinseo at 3.75× pro-forma sits in the 25% band — modest paydown.
Basket chain4 terms · 3 dependencies
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Wiki precedent2 cases
Endo International — 2022 Restricted Payment Litigation
ECF sweep mechanics worked alongside builder-basket capacity in the dispute. Court upheld the borrower's CNI calculation, which fed the ECF formula by the same definitions.
AMC Entertainment — 2022 Refinancing
Refinanced into a longer-dated incremental tranche; ECF sweep stepdowns featured in the syndication discussion as a holder-protection counterweight to the loosened ratio test.
Precedents drawn from the public corpus (SEC filings, court opinions, market commentary). Other tenants' uploads are never used as comparables.
Evidence3 clauses
§2.05(c)p. 56
"The Borrower shall, on each Annual Mandatory Prepayment Date, prepay the outstanding Term Loans in an aggregate principal amount equal to the ECF Percentage of Excess Cash Flow for the immediately preceding fiscal year, less any voluntary prepayments made during such fiscal year."
§1.01 — ECF Percentagep. 22
""ECF Percentage" means (i) 50% if Senior Secured Leverage Ratio exceeds 4.00 to 1.00, (ii) 25% if Senior Secured Leverage Ratio is less than or equal to 4.00 to 1.00 but greater than 3.50 to 1.00, and (iii) 0% if Senior Secured Leverage Ratio is less than or equal to 3.50 to 1.00."
§1.01 — Excess Cash Flowp. 23
""Excess Cash Flow" means, for any fiscal year, Consolidated Net Income for such year plus depreciation, amortization, and other non-cash charges, minus capital expenditures, scheduled debt amortization, and permitted Restricted Payments paid in cash during such year."
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