Funded Participation Agreement Lmaadmin
It is also increasingly common for consent requirements to go beyond transfers, including partial participation and other synthetic agreements. It remains to be seen how these increasingly restrictive transfer provisions will affect restructuring in the years to come. Today, global financial markets in crisis are once again focusing on counterparty credit risk, as was the case after the collapse of Lehman Brothers a decade ago. The European secondary credit market uses a standard „loan participation“ form to transfer borrowers` risk and the profitability of a loan to the secondary market. The London-based Loan Market Association (lmA) publishes several forms of loan participation. In addition to the underlying borrower`s credit risk, the credit risk of the lender selling the loan on the market is a particular problem for investors who hold stakes in the LMA. The seller is called „Grantor“ of the participation. Pique interest is generally coiled and added to the existing principal of the loan under the terms of the credit agreement. If this is the case, all PIK interest activated prior to the trading date is part of the principal loan amount and the buyer pays for the purchase of these amounts with the initial amount of the seller`s capital at the agreed purchase price. These documents (for which the context allows, text, content, tables with macros and electronic interfaces, as well as their underlying assumptions, conversions, formulas, algorithms, calculations and other mathematical and financial techniques) are made available to members of the Credit Market Association, in accordance with the statutes of the Credit Market Association (a copy of which is available here) to facilitate the documentation of transactions in the credit markets.
None of the Loan Market Association, Allen-Overy or Clifford Chance assumes any responsibility for any use of these materials or any loss, damage or liability resulting from such use.