Wolf Theiss

LOAN PORTFOLIO TRANSACTIONS IN CEE&SEE

The chart assumes that the deal is structured as a straightforward sale of the loan portfolio by a domestic seller to a foreign buyer. Other possible structures involving a domestic SPV, securitization vehicles, asset management companies (AMC) or a “bad bank” as well as synthetic structures are considered in another upcoming publication.

GLOSSARY
1. METHODS FOR LOAN TRANSFERS
NOVATION - This transfers the rights and obligations of an existing lender by substituting them with identical rights and obligations on the part of a new lender. It requires the consent of all parties to the loan agreement but this consent is usually obtained in advance in the loan agreement. Although very common in the Euromarkets in transferring interests in syndicated loans, novation is either unavailable as a method for loan transfer or not used in practice in a number of the relevant jurisdictions.

TRANSFER OF CONTRACT - In some of the jurisdictions, there are special statutory provisions regulating the transfer of contract which, when applied and after their formalities are complied with, offer an outcome very similar to novation or transfers by way of assignment and assumption. The consent
of all parties is needed, but this can be obtained in advance.

TRANSFER BY WAY OF ASSIGNMENT AND ASSUMPTION -
This is designed to transfer all of an existing lender’s rights and obligations under a loan agreement to a new lender. In a number of the jurisdictions this is practically the only way to transfer obligations and to fully replace the existing (...)

Editors

Marcell
Németh
Partner
Austria

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