Acceleration (Financial Restructuring & Bankruptcy Glossary)

Summary

A provision in most loan agreements and in an indenture allowing a lender (in a credit agreement) or bondholders (in an indenture) to declare all outstanding indebtedness to be immediately due and payable following the occurrence of an event of default. By accelerating the loan, the lender or bondholder (or indenture trustee) typically can pursue its remedies seeking payment in full of all amounts owing under the agreement, including the full amount of principal, plus accrued and unpaid interest and any other fees and expenses, and/or a foreclosure on any collateral.