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  • 1.

    Jurisdictional pros and cons
    What are the primary advantages and disadvantages in your jurisdiction of incurring indebtedness in the form of bank loans versus debt securities?

  • 2.

    Forms
    What are the most common forms of bank loan facilities? Discuss any other types of facilities commonly made available to the debtor in addition to, or as part of, the bank loan facilities.

  • 3.

    Investors
    Describe the types of investors that participate in bank loan financings and the overlap with the investors that participate in debt securities financings.

  • 4.


    How are the terms of a bank loan facility affected by the type of investors participating in such facility?

  • 5.

    Bridge facilities
    Are bank loan facilities used as ‘bridges’ to permanent debt security financings? How do the structure and terms of bridge facilities deviate from those of a typical bank loan facility?

  • 6.

    Role of agents and trustees
    What role do agents or trustees play in administering bank loan facilities with multiple investors?

  • 7.

    Role of lenders
    Describe the primary roles and typical fees of the financial institutions that arrange and syndicate bank loan facilities.

  • 8.

    Governing law
    In cross-border transactions or secured transactions involving guarantees or collateral from entities organised in multiple jurisdictions, which jurisdiction’s laws govern the bank loan documentation?

  • 9.

    Capital and liquidity requirements
    Describe how capital and liquidity requirements impact the structure of bank loan facilities, including the availability of related facilities.

  • 10.

    Disclosure requirements
    For public company debtors, are there disclosure requirements applicable to bank loan facilities?

  • 11.

    Use of loan proceeds
    How is the use of bank loan proceeds by the debtor regulated? What liability could investors be exposed to if the debtor uses the proceeds contrary to regulations? Can investors mitigate their liability?

  • 12.

    Cross-border lending
    Are there regulations that limit an investor’s ability to extend credit to debtors organised or operating in particular jurisdictions? What liability are investors exposed to if they lend to such debtors? Can the investors mitigate their liability?

  • 13.

    Debtor’s leverage profile
    Are there limitations on an investor’s ability to extend credit to a debtor based on the debtor’s leverage profile?

  • 14.

    Interest rates
    Do regulations limit the rate of interest that can be charged on bank loans?

  • 15.

    Currency restrictions
    What limitations are there on investors funding bank loans in a currency other than the local currency?

  • 16.

    Other regulations
    Describe any other regulatory requirements that have an impact on the structuring or the availability of bank loan facilities.

  • 17.

    Collateral and guarantee support
    Which entities in the organisational structure typically provide collateral and guarantee support for bank loan financings? Are there limitations on which entities in the organisational structure are permitted to provide such support?

  • 18.


    What types of obligations typically share with the bank loan obligations in the collateral and guarantee support? If so, are all such obligations equally and ratably covered by the collateral and guarantee support?

  • 19.

    Commonly pledged assets
    Which categories of assets are commonly pledged to secure bank loan financings? Describe any limitations on the pledge of assets.

  • 20.

    Creating a security interest
    Describe the method of creating or attaching a security interest on the main categories of assets.

  • 21.

    Perfecting a security interest
    What steps are necessary to perfect a security interest on the main categories of assets? What are the consequences of failing to perfect a security interest?

  • 22.

    Future-acquired assets
    Can security interests extend to future-acquired assets? Can security interests secure future-incurred obligations?

  • 23.

    Maintenance
    Describe any maintenance requirements to avoid the automatic termination or expiration of security interests.

  • 24.

    Release
    Are security interests on an asset automatically released following its sale by the debtor? If so, are the releases mandated by law or contract?

  • 25.

    Non-fulfilment of guarantee obligations
    25 What defences does a guarantor have against claims for non-fulfilment of guarantee obligations? Can such defences be waived?

  • 26.

    Parallel debt requirements
    Describe any parallel debt or similar requirements applicable in a secured bank loan financing where an agent acts for multiple investors.

  • 27.

    Enforcement
    What are the most common methods of enforcing security interests? What are the limitations on enforcement?

  • 28.

    Fraudulent conveyance and similar doctrines
    Describe the impact of fraudulent conveyance, financial assistance, thin capitalisation, corporate benefit and similar doctrines on the structure of bank loan financings.

  • 29.

    Payment and lien subordination arrangements
    What types of payment or lien subordination arrangements, or both, are common where the debtor has obligations owing to more than one class of creditors?

  • 30.

    Creditor groups
    What creditor groups are typically included as parties to the intercreditor agreement? Are all creditor groups treated the same under the intercreditor agreement?

  • 31.

    Rights of junior creditors
    Are junior creditors typically stayed from enforcing remedies until senior creditors have been repaid? What enforcement rights do junior creditors have prior to the repayment of senior debt?

  • 32.


    What rights do junior creditors have during a bankruptcy or insolvency proceeding involving the debtor?

  • 33.

    Pari passu creditors
    How do the terms of the intercreditor arrangement change if creditor groups will be secured on a pari passu basis?

  • 34.

    Standard forms and documentation
    What forms or standardised terms are commonly used to prepare the bank loan documentation?

  • 35.

    Pricing and interest rate structures
    What are the customary pricing or interest rate structures for bank loans? Do the pricing or interest rate structures change if the bank loan is denominated in a currency other than the domestic currency?

  • 36.


    Have any procedures been adopted in bank loan documentation in your jurisdiction to replace LIBOR as a benchmark interest rate for loans?

  • 37.

    Other loan yield determinants
    What other bank loan yield determinants are commonly used?

  • 38.

    Yield protection provisions
    Describe any yield protection provisions typically included in the bank loan documentation.

  • 39.

    Accordion provisions and side-car financings
    Do bank loan agreements typically allow additional debt that is secured on a pari passu basis with the senior secured bank loans?

  • 40.

    Financial maintenance covenants
    What types of financial maintenance covenants are commonly included in bank loan documentation, and how are such covenants calculated?

  • 41.

    Other covenants
    Describe any other covenants restricting the operation of the debtor’s business commonly included in the bank loan documentation.

  • 42.

    Mandatory prepayment
    What types of events typically trigger mandatory prepayment requirements? May the debtor reinvest asset sale or casualty event proceeds in its business in lieu of prepaying the bank loans? Describe other common exceptions to the mandatory prepayment requirements.

  • 43.

    Debtor’s indemnification and expense reimbursement
    Describe generally the debtor’s indemnification and expense reimbursement obligations, referencing any common exceptions to these obligations.

  • Updates and trends

Cases & Lacambra is a client-focused international law firm with top-tier specialisation in banking, finance and tax law.  We offer bespoke advice and solutions to our clients, which rank among the most highly reputed national and international financial institutions, family offices, investment firms, group companies and high-net-worth individuals.

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Madrid
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