SunGard Provisions

Summary

In Canada, commitments to finance large acquisitions are increasingly containing conditions to closing the financing that correlate to the conditions to closing the acquisition. The provisions used to accomplish this correlation are known as SunGard language provisions, named after the 2005 acquisition of SunGard Data Systems, Inc. SunGard provisions were developed in the United States and are found in sponsor-led acquisition financings where there is no "financing out" condition in the underlying acquisition documents. The purpose of this provision is to curtail conditionality to the funding of the loan so there is more certainty for the seller that the borrower will have adequate sources of the funds to close the acquisition.