Posted on by whiggs

20 Legal nature of funded participation

  • In conclusion the nature of the participation arrangement is that:
  • the participant is not a direct party to the loan agreement governing theunderlying loan;
  • the lender does not transfer or assign rights or obligations under the loan or loan documentation to the participant;
  • the participant has no proprietary interest in either the loan or the loan documentation. The participant therefore has a contractual nexus with the lender only, and has no direct rights against the borrower.