Similar objectives, subtle differences

Author: | Published: 1 Dec 2009

This article is part of a series comparing and contrasting New York and English law and market practice relating to syndicated lending.

In the October 2009 issue of IFLR, we described certain differences between New York and English law and practice relating to the transfers of interests in loans by means of participations (in New York parlance) or sub-participations (in English parlance). This article discusses secondary trading that creates direct contractual privity between borrowers and transferees. The primary loan documentation forming the basis of comparison is the Primary Market Model Transfer Provision of the Loan Syndications and Trading Association (LSTA) and the senior multicurrency term and revolving facilities agreement for leveraged acquisition finance transactions of the Loan Market Association (LMA).

There are difference betsween New York law and English law in legal concepts underlying the nature of the debt sale. The importance of whether an obligation to lend has been...



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