Excess cash flow (ECF)
Cash left after operating costs, debt service and required reserves. It is what sweeps and traps act on.
How it works in a deal
Excess cash flow is what is left after operating costs, debt service and required reserves. Loan documents decide how much of it must be used to prepay debt (a cash sweep) and when it can be paid out to equity, usually only while ratios are above a set level.
Example. In GPU loans a sweep often steps up if the debt service coverage ratio falls, so the lender is repaid faster as the chips age. Cash sweeps and cash traps explained →
For in-house counsel
Excess cash flow in the filed documents
Where the term turns up in filed contracts and what is market, for the lender’s or the borrower’s side. Previews are open; the full text is free with InfraCompute Weekly.
- Clause library: Cash trap in data centre ABSIn a data centre securitisation the issuer keeps excess cash flow while the debt service coverage ratio stays above a set level.…
- Bond protections: sharing the excess cashFour of the project bonds offer half of the excess cash flow to holders every six months, on top of scheduled amortisation. The…
- Financing clause libraryCash traps, coverage ratios, cures and step-in, from the filed deals.
- The legal desk for in-house counselContract library, issues lists, checklists and English law notes.
Related terms
Explanatory definition, not a statement that a particular transaction contains this term or a substitute for its contractual definition.
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