What form do ancillary facilities commonly take?

An ancillary facility available to the borrower up to a certain amount and for a given period to be drawn upon only in a certain contingency and on short notice, commonly under a letter of credit, is a standby facility.  It may take the form of a swingline facility, made available to a borrower generally on a same‐day basis for short drawing periods to refinance any maturing instrument of a group member of affiliated companies.

An ancillary facility may take the form of bridge financing.  Bridge financing is interim financing that covers a financing gap, commonly the time period between the maturity of a loan and its replacement with other financing, typically another loan.  “Certain funds” are bridge financing in European acquisition finance provided by lead arrangers to the borrower sufficient to cover any cash payment for the acquisition and to bridge the gap until the permanent finance has been arranged.

Ancillary facilities include hedging arrangements “carved out” of the revolving facility commitment of lenders, usually arrangers.  They are entered into by the borrower and the “hedge counterparty” to hedge the interest rate and any exchange rate risks in relation to the facilities.