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...