19 Why you ask?

if the consent of the borrower is required for an assignment or novation; if assignment or novation is permitted but is unlikely to be obtained (for example in the borrower’s insolvency); if the proposed transferee is prohibited from being a lender of record because it is not a permitted transferee under the loan agreement (see […]

08, 15, 2015
Comments Off on 18 The issue of set off in funded participation

By whiggs

Transfer of financial assets in transactions

18 The issue of set off in funded participation

Because the participation is a contractual arrangement an additional risk for the participant is if the borrower exercises a right of set off against the lender. This could happen if the lender is a bank and the borrower has a deposit with the lender or if the lender has entered into a swap or derivative […]

08, 15, 2015
Comments Off on 17 Funded participation

By whiggs

Transfer of financial assets in transactions

17 Funded participation

Sometimes a party will not want to take a direct novation of a loan but for one reason or another will want a commercial exposure in the loan. It may be motivated to do this because it has taken a positive credit position on the borrower and would otherwise be prohibited for one reasons or […]

08, 15, 2015
Comments Off on 16 Exercise – declaration of trust

By whiggs

Transfer of financial assets in transactions

16 Exercise – declaration of trust

Could a trust be created over the rights of the Lender based on the following clause? “Subject to this Clause [•], a Lender (the Existing Lender) may: (a) assign any of its rights; or (b) transfer by novation any of its rights and obligations, to another bank or financial institution or to a trust, fund […]