Reassessing MAC Provisions in JOLCO Financings

Material adverse change (MAC) provisions play an important role in JOLCO financings, with their significance becoming more pronounced during periods of significant change in the market and geopolitical conditions affecting the aviation industry. It is important that the scope, timing, and assessment criteria of MAC provisions are carefully calibrated to protect lenders and lessors against changes in credit risk while preserving transaction certainty. Achieving an appropriate balance requires MAC provisions to be tailored to the specific circumstances and intended allocation of risk in each transaction and may warrant a reassessment during periods of significant change in the lending environment. 

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