Debt finance

No.

Generally

Loan agreements and other finance documents are subject to general statutory, contractual and common law principles.

Australian courts will not enforce a penalty in a loan agreement. Lenders muat therefore be careful when determining the rate of default interest and the amount of any cancellation, prepayment or similar fees.

A lender should be aware that, even if it is rightfully exercising its rights under the loan agreement, the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) prohibits persons from engaging in unconscionable conduct or morally wrong behavior. In determining what constitutes unconscionable conduct, the court will consider the bargaining power of the parties, the parties' respective abilitiesto understand the documents and the lender's disclosure of certain risks.

Unfair contract legislation

The Australian Consumer Law and the ASIC Act regulate unfair contract terms found in standard form contracts entered into or renewed after 12 November 2016 where:

• it is for the supply of goods or services or the sale or grant of an interest in land;
• at least one of the parties is a small business (employs less than 20 people, including casual employees employed on a regular and systematic basis); and
• the upfront price payable under the contract is no more than AUD300,000 or AUD1 million if the contract is for more than 12 months.

A standard form contract is a contract that is prepared by one party where the other party has little or no scope to negotiate the terms of the contract. If a court declares a term of a standard form contract to be unfair, the term will be void and the contract will continue to operate unless it is inoperable without the void term. Consumers and Australian Consumer Law regulators are able to claim for damage incurred as a consequence of the unfair contract term.

In the context of financing transactions, the unfair contract legislation will be primarily relevant to home loans and small to medium sized commercial loans documented on the lender's standard form documentation.

Specific types of lending

Acquisition finance

An Australian company may not provide financial assistance to a person to purchase shares in the company itself or its holding company (even if that holding company is incorporated outside of Australia) unless the financial assistance:

• does not materially prejudice the company, its shareholders or its ability to pay its creditors (the ‘no material prejudice’ exception);
• has been approved by the company’s shareholders in accordance with the 'whitewash' procedure prescribed by the Corporations Act 2001 (Cth); or
• falls within a specified exemption. A common example of prohibited financial assistance is the granting of a guarantee or security by a company whose shares are being purchased in support of a loan advanced by a financier to the purchaser to fund the share acquisition.

Companies and their financiers do not generally rely on the ‘no material prejudice’ exception and the specified exemptions are only sometimes relevant. Instead, the common practice in Australia (and the prudent approach) is for the company to obtain shareholder approval of the financial assistance by way of the whitewash procedure. The whitewash procedure in Australia can be more time consuming and complex to implement than equivalent procedures in other jurisdictions.

A breach of the financial assistance prohibition will not affect the validity of the transaction, but may result in civil and criminal sanctions.

The Personal Property Securities Act 2009 (Cth) (PPSA)

The PPSA came into effect on 2012 and it comprehensively overhauled the laws then in force for taking security over personal property in Australia. The PPSA has been modelled on the equivalent Canadian and New Zealand statutes and it bears much resemblance to Article 9 of the US Uniform Commercial Code. 

The PPSA adopts a substance-over-form definition of 'security interest', which captures not only traditional forms of security, such as charges and mortgages, but also quasi-security arrangements, such as turnover trusts and retention of title. The PPSA also deems certain other arrangements to be security interests, such as leasing or bailment interests and the interests in assigned receivables. Each of these types of 'security interests' should be perfected, most commonly by registration on the Personal Property Securities Register, to ensure that it operates effectively upon the grantor’s insolvency or liquidation. It is important to give careful consideration to whether a registrable form of ‘security interest’ under the PPSA arises in the relevant transaction.

Standard form documentation

Most syndicated finance transactions in Australia are documented on the basis of recommended form Australian law documentation published by the Asia Pacific Loan Market Association (APLMA). This documentation has been modelled on the recommended forms produced by the Loan Market Association in London.

Less complex and usually bilateral transactions are generally documented on bank standard form documentation prepared in-house or on bespoke facility documentation prepared by the advising solicitors.

The Banking & Financial Services Law Association (BFSLA) has produced standard templates for legal opinions in financing transactions and these are generally followed in the Australian market.

Generally

Loan agreements and other finance documents are subject to general contractual principles. For example, Belgian courts may decide not to enforce a penalty or may decide to reduce the agreed amount. Lenders hence have to be careful about the rate of default interest charged on a loan.

Specific types of lending

Specific to the area of mortgage lending is the issue of whether a lender falls within the new Belgian mortgage regime. The Mortgage Credit Directive, implemented in Belgium through the law of 22 April 2016 amending the provisions on consumer credit and mortgage credit in the Code of Economic Law, aims to prevent the irresponsible lending and borrowing practices that were exposed during the global financial crisis. The Law imposes a number of requirements on lenders including the need to:

• assess the creditworthiness of the consumer;
• provide the consumer with the personalized information needed to compare the credits available on the market; and
• ensure that the relevant staff of creditors, credit intermediaries and appointed representatives possess an adequate level of knowledge and competence, in order to achieve a high level of professionalism.

Consumer credit is regulated in the Code of Economic Law. The Consumer Credit Directive (2008/48/EC) was implemented in Belgian law by the Act of 13 June 2010 and amended by the law of 22 April 2016 amending the provisions on consumer credit and mortgage credit in the Code of Economic Law. The Law also imposes a number of requirements on credit providers.

Generally

Loan agreements and other finance documents are subject to general contractual law regulation (set out in the Brazilian Civil Code). For example, Article 192 of the Brazilian Constitution, enacted in 1988, established a 12% per year ceiling on bank loan interest rates. However, since the enactment of the Constitution, this rate had not been enforced, as the regulation regarding the ceiling was pending. Several attempts have been made to regulate the limitation on bank loan interest, but none of the proposals has been implemented. On 29 May 2003, Constitutional Amendment No. 40 (EC 40/03) was enacted and revoked all subsections and paragraphs of Article 192 of the Brazilian constitution. This amendment allowed the Brazilian financial system to be regulated by specific laws for each sector of the system rather than by a single law relating to the system as a whole. With the enactment of the new Brazilian Civil Code (or Law No. 10,406 of 10 January 2002), unless the parties to a loan have agreed to use a different rate, in principle the interest rate ceiling has been pegged to the base rate charged by the National Treasury Office (Tesouro Nacional). However, there is presently some uncertainty as to whether the target rate set by Special Clearance and Escrow System (Sistema Especial de Liquidação e Custodia, or SELIC) or the 12% per annum interest rate established in the Brazilian tax code should apply.

The impact of EC 40/03 and the provisions of the new Civil Code are uncertain at this time but any substantial increase or decrease in the interest rate ceiling could have a material effect on the financial condition, results of operations or prospects of Brazilian financial institutions.

Consumer loans are also generally subject to the restrictions of the Consumer Defense Code and certain other related regulation from the Central Bank. In 1990, the Brazilian Consumer Defense Code was enacted to establish rigid rules to govern the relationship between product and service providers and consumers and to protect final consumers. In June 2006, the Brazilian Supreme Court of Justice ruled that the Brazilian Consumer Defense Code also applies to transactions between financial institutions and their clients. Financial institutions are also subject to specific regulation of the National Monetary Council (CMN), regulating the relationship between financial institutions and their clients. CMN Resolution No. 3,694 dated 26 March 2009, as amended, established new procedures with respect to the settlement of financial transactions and to services provided by financial institutions to clients and the public in general, aiming at improving the relationship between market participants by fostering additional transparency, discipline, competition and reliability on the part of financial institutions. The new regulation consolidates all the previous related rules. The main changes introduced by the Consumer Defense Code are described below:

• Financial institutions must ensure that clients are fully aware of all contractual clauses, including responsibilities and penalties applicable to both parties, in order to protect the counterparties against abusive practices. All queries, consultations or complaints regarding agreements or the publicity of clauses must be promptly answered, and fees, commissions or any other forms of service or operational remuneration cannot be increased unless reasonably justified (in any event these cannot be higher than the limits established by the Central Bank);
• Financial institutions are prohibited from transferring funds from their clients’ various accounts without prior authorization.
• Financial institutions cannot require that transactions linked to one another must be carried out by the same institution. If the transaction is dependent on another transaction, the client is free to enter into the latter with any financial institution it chooses.
• Financial institutions are prohibited from releasing misleading or abusive publicity or information about their contracts or services. Financial institutions are liable for any damage caused to their clients by their misrepresentations.
• Interest charges in connection with personal credit and consumer directed credit must be proportionally reduced in case of anticipated settlement of debts.
• Adequate treatment must be given to the elderly and physically disabled.

Specific types of lending

Payroll loans are a type of financial product under which the interest and repayment charges are deducted directly from employees’ or retirees’ pay checks. Since the repayment of payroll deduction loans is directly deducted from the salaries of public servants and private sector employees or from INSS (Brazilian Social Security System) retiree or pension benefits, in practice the credit risk is that of the entity to which borrowers are related. This feature enables banks to extend loans at rates lower than those charged in connection with other products offered by financial institutions in Brazil. This payment deduction mechanism is regulated by a number of laws and regulations, at the federal, state and municipal levels, which establish deduction limits and provide for the irrevocability of the authorization given by a public servant, private sector employee or INSS beneficiary to deduct the amount for purposes of settlement of the loan.

In addition, the extension of payroll deduction loans to public servants and social security service (INSS) retirees and pensioners depends on the authorization by public entities to which these persons are related.

If an employee’s employment contract terminates, whether through termination by the employer, voluntary departure or death, repayments under the loan will depend mainly on the financial ability of the borrower or his/her successors to repay the loan. In certain instances, the borrower can offer their severance package as collateral. However, such security may not be able to cover the amount borrowed since there are some limitations on the amount to be offered as collateral. Similarly, if a private employer suffers losses or enters financial distress or bankruptcy, it may not be able to pay the salaries on which the payroll deductions depend. Any of these events could increase the risk in payroll loan portfolios and increase the need for measures to control default through restrictions on new loans, which may adversely affect a company's financial condition and results. Finally, under Brazilian law, if a borrower whose payments are deducted from his salary gets divorced or separated from his spouse, alimony payments may be directly deducted from his salary. These deductions may have priority over other liabilities (including over amounts owed to banks), thus potentially limiting a bank’s ability to receive repayment.

Standard form documentation

The Brazilian market does not have standard form documentation for loans.

Generally

Enforceability

Loan agreements and other finance documents are subject to general contractual principles. Enforcement of contracts is subject to applicable bankruptcy, insolvency, moratorium, reorganization and other similar laws relating to or affecting the enforceability of creditors’ rights generally, general equitable principles and the discretion of courts in granting equitable remedies.

Interest

Except with respect to mortgages on real property and, in Québec, hypothecs subject to the provisions of the Civil Code of Québec, a lender may charge any rate of interest pursuant to the Interest Act (Canada), provided that if the rate of interest is payable at a rate or percentage per day, week, month or for any period less than a year, the lender discloses in the agreement the yearly rate or percentage of interest to which the other rate or percentage is equivalent. If such disclosure is not included in the agreement, no interest exceeding the rate or percentage of 5% per annum is chargeable, payable or recoverable on any part of the principal money. In addition, the Criminal Code (Canada) prohibits the charging of annual interest that exceeds 60%. Any rate above 60% is a ‘criminal rate’ and is illegal. Debtors may use such a finding as a reason to avoid repayment. ‘Interest’ is broadly defined under the Criminal Code (Canada) and includes all charges and expenses, including fees, fines, penalties and commissions.

Environmental issues

Lenders must also be mindful of the various environmental liabilities and obligations that apply under federal, provincial and territorial laws to their debtors. In certain circumstances, these liabilities and obligation can extend to the lender. This can arise if the lender is found to have exercised control or direction over the day-to-day operations or financial management of the debtor or becomes the owner of a contaminated site by foreclosure or similar action.

Specific types of lending

For secured lending to individual debtors, lenders should consider the application of various provincial and territorial legislation which protects the rights of spouses. For more information, see Giving and taking guarantees and security. 

Standard form documentation

Loan documents and other finance documents are generally the bank’s standard form documentation.

Generally

Loan agreements and other finance documents are subject to general contractual principles.

Specific types of lending

Mortgage loans

Typically, each financial institution states its conditions and performs an assessment of the debtor. The conditions usually include, for example, the amount and regularity of the income of the debtor, their age, number of dependents, and financial background. Usually the loan also involves insurance taken in favor of the debtor (fire and for surviving dependents). If a financial institution includes any abusive clause within the loan agreement, and such clause affects the consumer, a claim may be submitted before the National Consumer Service.

Standard form documentation

Most of the financial transactions standard templates are prepared by banks in-house.

Generally

The rate of default interest charged on a loan or on finance documents cannot exceed the maximum default interest rate authorized by the Superintendency of Finance for each calendar year.

Specific types of lending

Some of the most common specific types of lending are:

• mortgage loans;
• consumer credits;
• leasing for housing or vehicles; and
• vehicle-secured loans.

Please note that loans are not subject to registration. However, the granting of a mortgage over real estate requires the issuance of a public deed by a notary and the registration of the mortgage with the applicable land registry office, which triggers the corresponding registration tax as well as the fees charged by the notary plus the applicable VAT.

Standard form documentation

Most Colombian law finance transactions, including loan agreements are governed by documentation based on standard forms previously approved by the Superintendency of Finance.

Generally

Loan agreements and other finance documents are subject to general contractual principles (with courts also partially mitigating the risks by their powers, eg by lowering an unjust contractual penalty and/or interest rate). The risks can also be reduced by various kinds of security.

Specific types of lending

Lending to consumers is regulated via the Act on Consumer Credit, which includes specific provisions governing loans for housing purposes. Therefore, there is no separate act on mortgages/housing loans in Czech law.

Company in crisis

Pursuant to the Act No. 182/2006 Coll., Insolvency Act (Insolvenční zákon), a company is considered 'in crisis' if it is:

• bankrupt (ie insolvent); or
• under the threat of bankruptcy.

A creditor who, during the crisis of a company, or until the declaration of bankruptcy or the grant of a restructuring permit, provided a loan to such company and at the time of creation of the company's obligation knew, or could have known, of its crisis, may satisfy its claim from the company’s assets to the extent attributable to the amount of the loan as authorized by the insolvency administrator. Such creditor has to file his receivable in a standard way, within the deadline stipulated by the insolvency administrator.

Standard form documentation

Bilateral finance transactions are more likely to be documented on bank standard form documentation prepared in-house (each bank uses its own templates for such purpose).

Generally

Loan agreements and other finance documents are subject to general contractual principles. Consumer clients must be taken into consideration because the regulations regarding consumers are mandatory.

Specific types of lending

For instance, providing mortgages to consumers is subject to mandatory regulations. The Mortgage Credit Directive, which is implemented in Finland through chapters 6, 7 and 7a of the Consumer Protection Act, imposes a number of requirements on lenders. These requirements include, amongst other things, the lender’s need to:

• conduct affordability tests before lending;
• provide standard information about the mortgage to enable borrowers to compare products; and
• ensure that staff are suitably trained.

Standard form documentation

Most Finnish syndicated finance transactions are governed by documentation based on recommended forms published by the Loan Market Association (LMA). These are often governed under English law, however. Bilateral finance transactions are more likely to be documented on bank standard form documentation prepared in-house and be governed by Finnish law.

Generally

Lenders are required to inform any borrower (professional or consumer) of the percentage rate of charge (taux effectif global) of the loan.

Since the ordonnance n°2019-740 dated 17 July 2019, if a lender fails to provide the percentage rate of charge (taux effectif global), such lender may not be entitled to receive the contractual interest rate of the loan, up to a proportion to be determined by a judge, depending on the damage actually suffered by the borrower.

Specific types of lending

Consumer and mortgage credit rules aim to prevent irresponsible lending to consumers and impose a number of requirements on lenders including the need to, among other things:

• conduct affordability tests before lending; and
• provide standard information about the credit to enable borrowers to compare products (eg annual percentage rate of charge).

Generally

Loan agreements and other finance documents are subject to general contractual principles, such as:

• the general civil law principle of good faith (Treu und Glauben);
• the general civil law principle prohibiting violation of good morals (gute Sitten);
• usury (Wucher); and
• the prohibition of compound interest (Zinseszinsverbot) under German law.

Standard form documentation

Most German law syndicated finance transactions are governed by documentation based on the German law versions of the recommended forms published by the Loan Market Association (LMA) in the English language. Bilateral finance transactions are more likely to be documented on bank standard form documentation prepared in-house in German language. Sometimes, the standard documentation developed by the Association of German Banks (Bundesverband deutscher Banken) is used.

Default onterest 

A Ghana Court may refuse to order the recovery of default interest on the ground that such interest amounts to a penalty.

Insolvency issues

On the commencement of official liquidation, remuneration up to a prescribed limit owed to employees in respect of the whole or a part of the four months preceding the commencement of the winding-up and rates, taxes, or similar payments owed to the state or a local authority have priority over payments to floating charge creditors and general unsecured creditors of the company.

Generally

Loan agreements and other finance documents are subject to general contractual principles. For example, Hungarian courts will not enforce an excessive penalty and so lenders have to be careful about the rate of default interest charged on a loan. Lenders therefore tend to opt for a modest uplift of around 2% above the usual rate.

Specific types of lending

Specific to the area of mortgage lending is the issue of whether a lender falls within the Hungarian mortgage regime. The Mortgage Credit Directive, as implemented in Hungary, aims to prevent the irresponsible lending and borrowing practices that were exposed during the global financial crisis. It imposes a number of requirements on lenders including the need to:

• conduct affordability tests before lending;
• provide standard information about the mortgage to enable borrowers to compare products; and
• ensure that staff are suitably trained.

Standard form documentation

Major syndicated finance transactions under the laws of Hungary are governed by documentation based on recommended forms published by the Loan Market Association (LMA). Bilateral finance transactions are more likely to be documented on bank standard form documentation prepared in-house.

Generally

Loan agreements and other finance documents are subject to general contractual principles. For example, a contractual provision that has the effect of placing an increased obligation on a party as a result of a breach of contract needs to be carefully examined to establish if it amounts to a genuine pre-estimate of probable loss. If not, it is likely to be considered to be an unenforceable penalty.

Examinership

Examinership is a corporate rescue procedure provided for under the Companies Act 2014. The appointment of an examiner will restrain any enforcement action (including the appointment of a receiver) against a company for the duration of the examinership (typically 70 days, but extendable to 100 days) during which the examiner will attempt to put in place a scheme of arrangement with the company’s creditors. During the period of examinership, a lender cannot enforce its security or seek to appoint a receiver over the company’s assets without the examiner’s consent.

Specific types of lending

Depending on the borrower in question – and particularly where consumers and SMEs are involved, lenders may have enhanced obligations towards borrowers; for example, when advertising products, communicating with borrowers and undertaking arrears handling and enforcement procedures.

Generally

Loan agreements and other finance documents are subject to general contractual principles.

However, certain principles of law cannot be contractually derogated and any contrary provisions contained in the finance documents would be null and void. As an example, finance documents may not provide for the exclusion of liability in case of gross negligence (colpa grave) or willful misconduct (dolo), and there are limitations to accrual and liquidation of interest (the Italian Usury Legislation applies in this case) and compound interest.

Furthermore, the enforcement of obligations of a party or the binding effect of such obligations may be limited by laws regarding bankruptcy, receivership, insolvency, liquidation, reorganization and any laws generally affecting the rights of creditors. In particular any payment made in advance in respect of its due date as originally agreed between the parties, including as a consequence of the acceleration of such payment obligation or as a result of the operation of any mandatory prepayment provision contained in the finance documents, may, at certain conditions, be deemed ineffective vis-à-vis the bankruptcy administration of the payer, pursuant to Article 65 of the Bankruptcy Law, and accordingly the bankruptcy administration of such payer may request the restitution of such payment.

In addition, it is worth noting that:

• In banking transactions, a loan facility (from an accounting perspective) constitutes an asset of the lending bank rather than a liability but Directive 2014/59/EU (Bank Recovery and Resolution Directive or BRRD) and the relevant powers of the competent resolution authority may still be relevant eg in relation to a bank's potential liabilities to other syndicate members in a loan or an inter-creditor arrangement.
• If a financial institution happens to be a borrower, then its liabilities to repay debt may be subject to bail-in.

Specific types of lending

Specific to the area of mortgage lending is the issue of whether a lender falls within the recently formed Italian mortgage regime. The Directive 2014/17/EU on credit agreements for consumers relating to residential immovable property, implemented in Italy through the Consolidated Banking Act and the Transparency Provisions, aims to prevent the irresponsible lending and borrowing practices that were exposed during the global financial crisis. The implementing regulations impose a number of requirements on lenders including the need to:

• conduct affordability tests before lending;
• provide standard information about the mortgage to enable borrowers to compare products; and
• ensure that staff are suitably trained.

Standard form documentation

It is quite common to see Italian law syndicated finance transactions governed by documentation based on forms published by the Loan Market Association (LMA), duly amended and integrated to be compatible with Italian law and Italian market standards. It is, however, also very common to see syndicated and bilateral finance transactions documented on bank standard form documentation prepared in-house or other simplified standard forms prepared by external legal advisors but diverging from the LMA.

Yes, there are some risks and issues around lending.

Generally, contractual principles apply to loan agreements and other finance documents.

Those risks may be credit risks, default risks, interest rate risks which may be capped to a certain rate, percentage, exchange rate risks for cross-border transactions, security risk value.

Specific types of lending

Banks also acting as lenders in the real estate sector have access to other sources for their lending activities through, among others, the creation, in 2010, of the WAEMU Regional Mortgage Refinancing Fund (Caisse Régionale de Refinancement Hypothécaire de l’UEMOA). That fund was created by the West African States Central Bank, the West African Development Bank (Banque Ouest Africaine de Développement (BOAD)) and the CREPMF.

Through that fund, they are able to access international capital markets and get resources for the funding of their mortgage activities.

One of its missions is to provide resources for the refinancing of mortgage loans to credit institutions in the WAEMU through the issuance of loans on the regional financial markets or through concessional financing from development partners.

Insurers in the WAEMU also invest in real estate, through pension funds, for long-term capital to the housing industry. Ivory coast has two main pension funds: the National Social Insurance Fund (CNPS) dedicated to the private sector and a shareholder of two banks, Société Générale and Attijariwafa Bank, and several investments funds (Amethis, Yelen and AfricInvest). The other fund is the General pension fund for civil servants (Caisse générale de retraite des agents de l'État).

Standard form documentation

Banks have their own standard form documentation that are used during bilateral finance transactions.

Cross-border financial transactions are sometimes based on the Loan Market Association standard documentation or on other standard forms.

Generally

Loan agreements and other finance documents are subject to several Japanese laws, including the Interest Rate Restriction Act and the Civil Code. The maximum interest rate permitted is between 15% and 20% depending on the lending amount. The maximum rate allowed for liquidated damages in the case of the borrower's default is 1.46 times the applicable maximum interest rate allowed.

Specific types of lending

When lending to individuals, the Total Volume Control which limits the amount that may be outstanding by reference to an individual's salary will apply. For this purpose, the lender is required to use credit information held by a designated credit bureau to check the individual borrower's financial credibility.

Standard form documentation

The Japan Syndication and Loan-Trading Association has standard form documentation often used by Japanese lenders. Foreign lenders typically use their own standard form documentation.

Generally

Luxembourg loan agreements and finance documents are subject to general contractual principles. For instance:

• They should be entered into in bona fide.
• Penalty clauses (clauses pénales), and similar clauses on damages or liquidated damages are allowed to the extent that they provide for a reasonable level of damages.
• Compounding of interests is subject to certain conditions.
• Specific performance may not always be available and may result only in damages.

Specific types of lending

Specific to the area of mortgage lending is the issue of whether a lender falls within the recently formed Luxembourg mortgage loan regime. The Mortgage Credit Directive, implemented in Luxembourg in the Luxembourg Civil Code, aims to prevent the irresponsible lending and borrowing practices that were exposed during the global financial crisis. The Mortgage Credit Directive applies to first and second ranking mortgages. It imposes a number of requirements on lenders including the need to:

• conduct affordability tests before lending;
• provide standard information about the mortgage to enable borrowers to compare products; and
• ensure that staff are suitably trained.

Standard form documentation

Apart from consumer, mortgage or small corporate loans, major loan financings are not typically governed by Luxembourg law. However this may change as credit providers are using more regularly Luxembourg law.

Syndicated finance transactions are governed by documentation based on recommended forms published by the Loan Market Association (LMA). Bilateral finance transactions are more likely to be documented on bank standard form documentation prepared in-house.

Loan agreements are contractual in nature. There are also restrictions on capitalization of interest.

Generally

Loan agreements and other finance documents are subject to general contractual principles. There are no specific limitations on interest rates or the ability of lenders to charge default interest under loan agreements, however, there may be general or practical limitations stemming from usury statutes, judicial precedents and market conditions that may limit the amount of the rate as well as from tax considerations, particularly in the case of transactions among related parties.

In the event of proceedings in Mexico seeking performance of obligations of a Mexican borrower, pursuant to Mexican Monetary Law, the borrower may discharge its respective obligations by paying any sums due in a currency other than Mexican currency, in Mexican currency at the rate of exchange prevailing in Mexico and fixed and published by Banco de México (BANXICO) in the Official Gazette of the Federation of Mexico on the date preceding the date of payment.

Specific types of lending

In mortgage and consumer lending, the National Commission for the Protection and Defense of Users of Financial Services (CONDUSEF) is granted authority to provide for a list of ‘abusive clauses’ which institutions will not be able to include in their adhesion contracts, as well as the regime for its supervision and removal. Financial adhesion contracts are non-negotiable financial contracts which are offered by financial institutions and accepted ‘as is’ by financial services users seeking the corresponding financial service.

Standard form documentation

There are no recommended forms of lending documentation provided by market participants or regulators. Most finance transactions are documented on bank standard form documentation prepared in-house or by external legal counsel.

There is a general requirement to use MAD for domestic transactions but if another currency is used, an office exchange approval may be needed.

Credit institutions are subject to a general regime for information, advice and warnings in their relations with their customers.

Credit institutions are required to provide more specific information on people with consumer status.

Moroccan borrowers (professionals or consumers) must receive an information from the lenders on the percentage rate of charge (taux effectif global) of any credit transaction governed or not by Moroccan Law. 

There are no specific Dutch law risks around lending.

Generally

Although there are no specific Dutch law risks around lending, regard needs to be had to certain general doctrines of law (comparable to similar doctrines in non-Dutch jurisdictions) when extending loans, such as ultra vires, corporate power, fraudulent conveyance and other laws of general application.

Specific types of lending

Lending to consumers is highly regulated under the Dutch Financial Supervision Act (Wet op het Financieel Toezicht). Furthermore, based on Dutch civil law, a (special) duty of care is applicable to financial entities, including banks. This (special) duty of care entails that financial entities should, in all their activities, take the interest of their clients (consumers and non-consumers) into account. The more professional the client of the financial entity is, the less far-reaching the (special) duty of care of the financial entity towards its client will be. Please note that this concept is developed in Dutch legal precedents and that it is subject to continuous change. The (special) duty of care that a financial entity might have, is highly dependent on the specific circumstances of the case.

Standard form documentation

The Netherlands frequently uses standard Loan Market Association-based documentation in extending credit.

Generally

Loan agreements and other finance documents are subject to general contractual principles. There are few general risks or issues particular to lending transactions (such as usury laws or similar), beyond these risks which generally arise in other jurisdictions.

There is a renewed focus on conduct with new standards being imposed on financial service providers to ensure that they serve the needs of customers, treat customers fairly, recognise and prioritise customer interests and effectively manage conflicts of interest. The FMA is expecting this to be actively monitored and managed by boards and senior management with legislation implementing new conduct licensing regime expected to be introduced in Parliament by the end of 2019.

Specific types of lending

Loan-to-value ratios limit New Zealand banks on the amount of low-deposit residential mortgage lending. Banks and other institutions must abide by prudent lending standards.

Standard form documentation

Banks and other consumer finance providers typically use their own standard form loan agreements and security documents for transactions under NZD2 million, and often for larger transactions also.

Generally

Loan agreements and other finance documents are subject to general contractual principles under Norwegian law, such as principles of revision of unfair contract terms. Certain statutory rules applying to financial institutions may also have implications to a lender, such as the mandatory requirement to include a maximum liability for a security interest or guarantee in order to ensure its validity if that security interest or guarantee is given in favor of a financial institution (other than in respect of security provided for the borrower's own debt).

Specific types of lending

Norwegian law poses certain challenges in the context of project finance and certain other types of asset lending transactions as security cannot as a general rule be granted over contracts as such (only monetary claims arising under a contract), requiring careful structuring of these types of transactions.

Standard form documentation

Most Norwegian law syndicated finance transactions are governed by documentation based on recommended forms published by the Loan Market Association (LMA), but adapted for the Nordic market excluding or reducing the scope of a number of provisions in the standard template. Bilateral finance transactions are sometimes made using a simplified form of the LMA standard, but will most often be documented on bank standard form documentation prepared in-house.

Generally

Loan agreements and other finance documents are subject to general contractual principles. In addition, regulated companies are obliged to provide their clients, specially when they qualify as consumers, full and easy-to-understand information regarding the main conditions of the loans and credit facilities to be granted, being subject to penalties if those obligations are not fulfilled.

The administrative authorities in charge of attending consumers’ complaints are the National Institute for the Defense of Free Competition and the Protection of Intellectual Property Rights (INDECOPI) and the Superintendence of Banking, Insurance and Private Pension Fund Management Companies (SBS).

Specific types of lending

There are different types of lending available depending on the purpose for which the money is borrowed and the characteristics of the debtor. According to prudential regulations, specifically the Regulations for the Assessment and Rating of the Debtor and the Requirement of Provisions (Reglamento para la Evaluación y Clasificación del Deudor y la Exigencia de Provisiones), Resolution SBS 11356-2008, the types of credit granted by financial companies are:

• corporate credit;
• credit to large, medium, small and micro companies;
• revolving consumer credit;
• non-revolving consumer credit; and
• mortgage credit.

Standard form documentation

Standard form contracts for users of the financial system who qualify as consumers must be approved by the SBS and must comply with the requirements provided for under the Consumer Protection and Defense Code (Código de Protección y Defensa del Consumidor) – Law 29571 and the Regulations on Market Conduct Assessment of the Financial System (Reglamento de Gestión de Conducta de Mercado del Sistema Financiero) – Resolution SBS 3274-2017. Moreover, companies are obliged to provide their clients with information that is easy to process and understand regarding the most relevant conditions of the loan to be granted (including the term of the loan, annual effective interest cost rates (which includes interest rate and all expenses and fees related to the loan within a year), and penalties, among others).

Generally

Loan agreements and other finance documents are subject to general contractual principles.

Specific types of lending

Polish law regulates consumer credit activities. For more information, see Regulated activities – authorization.

Standard form documentation

Most Polish law syndicated finance transactions are governed by documentation based on recommended forms published by the Loan Market Association (LMA).

Generally

Loan agreements and other finance documents are subject to general contractual principles. However, it is important to note that interest rates are capped by law and therefore, loans provided to institutional/professional entities are subject to the limit established for commercial interest rates which is updated every six months and is currently set at 7%.

The Legal Regime on Credit Agreements for Consumers establishes a number of requirements on lenders when dealing with consumers, including the need to:

• conduct affordability tests before lending; and
• provide standard information about a mortgage to enable borrowers to compare products.

Standard form documentation

Bilateral finance transactions are more likely to be documented on bank standard form documentation prepared in-house but which usually tend to follow the form of the Loan Market Association (LMA) adapted to Portuguese standards and legal requirements.

Generally

Loan agreements and other finance documents are subject to general contractual principles. In Puerto Rico, a civil law jurisdiction, such contractual principles are found in the Puerto Rican Civil Code.

In addition, most lending is subject to credit and bankruptcy risk. In the case of insolvency, borrowers can ask for protection under the US Bankruptcy Code.

Specific types of lending

Mortgage lending is also subject to the US Real Estate Settlement Procedures Act and regulations which establishes specific requirements in the process of granting mortgage loans.

Standard form documentation

In the case of conforming mortgage loans there are standard forms for loans that can be acquired by the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association.

Romanian law prohibits a Romanian company from making, directly or indirectly, loans to its directors or officers, or to spouses, certain relatives or in laws of such directors or officers, or to any companies in which such a person is director or manager, or holds 20% or more of the share capital. Transactions may be invalidated for this reason and there may also be criminal sanctions.

Insolvency-related limitations should also be taken into consideration. By way of example, Romanian insolvency law prohibits the acceleration of loans due to reasons related to the opening of insolvency proceedings against the borrower.

As a general note, Romanian law governed loan agreements and other finance documents are subject to general contractual lending principles. Depending on the lending transaction's size and type, loan agreements used on the Romanian market are usually based on the bank's standard form documentation (particularly in the case of bilateral loans and small transactions) or Loan Market Association (LMA)-style facility agreements (eg for syndicated loans).

Generally

Credit agreements are subject to general contractual principles. For example, parties must agree on all the essential terms of the relevant type of agreement specified in the law, otherwise the agreement will be deemed unconcluded.

It should be noted that a penalty stated in the agreement may be lowered by the court where it is evidently disproportionate to the consequences of the breach.

Under Russian law a pledge cannot be enforced if the breach of the secured obligation is insignificant and the amount of the claim as a result of this is evidently disproportionate to the value of the pledged property. It is presumed that the breach is insignificant if (i) the overdue amount is less than 5% of the value of the pledged property and (ii) the late payment period is less than three months. In addition, in some cases the court may postpone the enforcement of the pledge.

In case of the pledgor's bankruptcy the pledgee receives only 70% (or 80% for claims under the credit facility agreement) of the funds derived from the enforcement of the pledge in priority. Any remaining claims will be satisfied in the general order.

Specific types of lending

In respect of credits for non-business related purposes, there is more legal protection for the borrower than in the case of corporate credits. The law includes some restrictions specific to consumer lending and mortgage lending to individuals for non-business related purposes. For example, the maximum amount of total charges for credit and the maximum amount of penalties for non-performance or breach of the borrower's obligations are regulated by law, while some services are provided to individuals free of charge.

Standard form documentation

In 2015 the Association of Russian Banks has developed and published a standard Russian-law governed syndicated credit facility agreement which does not include the newer requirements of Federal Law 'On Syndicated Credit (Loan) and Amendments to Certain Legislative Acts of the Russian Federation', however in any case such syndicated facilities are rare. For transactions with a foreign counterparty it is common to choose English law as the governing law and to use Loan Market Association standard forms.

Bilateral finance transactions are more likely to be documented on bank standard form documentation.

Yes, there are some risks and issues around lending.

Generally, contractual principles apply to loan agreements and other finance documents.

Those risks may be credit risks, default risks, interest rate risks which may be capped to a certain rate, percentage, exchange rate risks for cross-border transactions, security risk value.

Specific types of lending

Banks have access to other sources for their lending activities. They also provide loans in the real estate sector through the creation, in 2010, of the WAEMU Regional Mortgage Refinancing Fund (Caisse Régionale de Refinancement Hypothécaire de l’UEMOA) by the West African States Central Bank, the West African Development Bank (Banque Ouest Africaine de Développement (BOAD)) and the CREPMF. Through that fund, they are able to access international capital markets and get resources for the funding of their mortgage activities.

One of its missions is to provide resources for the refinancing of mortgage loans to credit institutions in the WAEMU through the issuance of loans on the regional financial markets or through concessional financing from development partners.

Insurers in the WAEMU also invest in real estate, through pension funds, for long-term capital to the housing industry. The main Senegalese pension funds are: the Retirement Pension Fund (IPRES, Institution de Prévoyance Retraite du Sénégal) which covers private-sector employees, government employees who are not civil servants and local authority employees, the National Pension Fund (Fonds National de Retraite) which is for civil servants and members of the armed forces and the Social Security Fund.

Standard form documentation

Banks have their own standard form documentation that are used during bilateral finance transactions.

Cross-border financial transactions are sometimes based on the Loan Market Association standard documentation or on other standard forms.

Generally

Loan agreements and other finance documents are subject to general contractual principles. For example, the Singapore courts will not enforce a penalty and so lenders have to be careful about the rate of default interest charged on a loan. It should be noted though that a contract by an unlicensed moneylender renders the borrower's obligation to repay unenforceable.

Specific types of lending

For more information see Lending and borrowing – restrictions.

Standard form documentation

Finance transactions are likely to be documented on bank standard form documentation prepared in-house which are then subject to negotiations between the bank and the borrower.

Generally

Loan agreements and other finance documents are subject to general contractual principles. For example, the Slovak courts will not enforce a penalty that does not correspond to the amount of the loan. Lenders therefore, have to be careful about the rate of default interest charged on a loan.

Specific types of lending

Specific to the area of mortgage lending is the issue of whether a lender falls within the recently formed Slovak housing loans regime. The Mortgage Credit Directive, implemented in Slovakia mainly through the Act on Housing Loans and a series of primary and secondary legislation, aims to prevent the irresponsible lending and borrowing practices that were exposed during the global financial crisis.

The Mortgage Credit Directive applies to first and second charge mortgages. It imposes a number of requirements on lenders including the need to:

• conduct affordability tests before lending;
• provide standard information about the mortgage to enable borrowers to compare products; and
• ensure that staff are suitably trained.

Company in crisis

Pursuant to the Commercial Code a company is considered ‘in crisis’ if it is:

• bankrupt (i.e. insolvent or in default); or
• under the threat of bankruptcy (i.e. the ratio of its equity to liabilities is less than the statutory limit ratio of 8:100).

A creditor who grants a loan to a company ‘in crisis’ or until the declaration of bankruptcy or the restructuring permit, may not be able to recover (some or) the full amount of the loan if it was aware of the company's financial position at the time the loan was granted.

Standard form documentation

Bilateral finance transactions are typically documented on bank standard form documentation prepared in-house.

Generally

No contractual arrangement may breach a legal rule or public policy. Legal rules may be derived from statute or from the common law whereas public policy is a subjective determination made by a judge by taking into account various policy issues, including the spirit and purport of the Constitution of South Africa.

There are a number of rules regarding the charging of interest and penalties. For instance, the in duplum rule states that the amount of interest charged by a lender may not exceed the capital amount of the loan. Further, under and in terms of the Conventional Penalties Act, a creditor shall not be entitled to recover, in respect of an act or omission which is the subject of a penalty stipulation, both the penalty and damages or, except where the relevant contract explicitly provides, to recover damages in lieu of a penalty. A court may also reduce a penalty where it is of the opinion that the penalty is out of proportion to the prejudice suffered by the creditor.

The rights of a creditor may also be limited by application of insolvency, reorganization, business rescue or other similar laws and a creditor may therefore not be able to enforce its rights under a finance agreement to the full extent contemplated therein.

It is important that all financial assistance resolution have been passed as a failure to do so results in the provision of such financial assistance being void. For more information, see Giving and taking guarantees and security – restrictions.

Specific types of lending

Lending to individuals and small corporations which are subject to the National Credit Act requires the lender to take greater precautions in order to ensure that the borrower will not be over-indebted. For more information, see Lending and borrowing – borrower considerations.

Standard form documentation

Most syndicated and large bilateral financing transactions are governed by loan documentation based on the recommended forms published by the Loan Markets Association and which have been tailored to suit the South African market. Documentation developed in-house by the banks is more commonly used for smaller, bilateral finance arrangements.

Generally

Facility agreements and other finance documents are subject to general contractual principles and laws. For example, the Spanish courts have, in relation to payment obligations, the discretion to grant cure periods and to moderate the enforcement of any event of default having consideration to the debt and economic circumstances.

In relation to defaults, Spanish courts are reluctant to accept the early termination of a loan or the enforcement of security for reasons apart from non-payment of the financing or, in some cases, material defaults (e.g. financial covenants).

Specific types of lending

Mortgage loans

Specific to the area of mortgage lending is the issue of the Mortgage Credit Directive, which has been implemented in Spain through Law 5/2019, dated 15 March. This directive aims to prevent the irresponsible lending and borrowing practices that were exposed during the global financial crisis. The Law 5/2019 applies to mortgage loans granted for the purpose of acquiring or renovating a residential dwelling, or acquiring property rights over land plots or buildings. It imposes a number of requirements on real estate lenders, including the need to:

• conduct affordability tests before lending;
• provide standard information about the mortgage to enable borrowers to compare products; and
• ensure that staff are suitably trained.

A lender is only entitled to declare the early termination of the loan on the grounds of non-payment of monies due in the event that this has been provided for in the loan agreement and duly recorded at the Land Registry. In the absence of an early termination clause duly recorded at the Land Registry, the lender is only entitled to claim the principal and interest overdue but not the whole amount of the loan. If the mortgaged property is transferred before the payment of any overdue instalment and there are other instalments not yet due, the property will be transferred subject to the mortgage corresponding to that part of the loan pending payment.

Early termination of the loan cannot be declared (and therefore security may not be enforced) unless the default in payment extends to (i) 3% of the total amount of the loan or 12 monthly instalments, if default occurs in the first half of the term of the loan; or (ii) 7% of the total amount of the loan or 15 monthly instalments, if default occurs in the second half of the term of the loan.

Law 5/2019 also applies to real estate credit intermediaries who are defined as any natural or legal persons that, not acting as a lender nor a notary public, engage in a commercial or professional activity, in return for remuneration, whether pecuniary or in any other form of agreed economic benefit, consisting in bringing a natural person into direct or indirect contact with a real estate lender. Real estate credit intermediaries are subject to registration and supervision requirements.

This law also regulates the advisory service provided by the real estate lender or credit intermediary. The advisory service in relation to the real estate loan is a separate activity from the granting and intermediation of real estate loans.

Consequently, real estate advice is configured as an ancillary activity to the real estate loan or intermediation, so that it can only be provided by those who are registered as lenders or intermediaries.

Regarding the registration regime, depending on the geographical scope of action of the real estate credit intermediary or lender, lenders and real estate credit intermediaries must be registered with the Bank of Spain or with the competent body of each Autonomous Community.

The Bank of Spain shall be responsible for the management of the registration of:

• real estate credit intermediaries and lenders that operate or are going to operate with borrowers with domiciles located throughout Spain or in the territorial area of more than one Autonomous Community, provided that they have their head office in Spain, regardless of whether they additionally operate or are going to operate through a branch or under the freedom to provide services in other EU States, and
• real estate credit intermediaries and lenders who are going to operate in Spain through a branch or under the freedom to provide services, whatever the geographical area in which they are going to carry out their activity.

The management of the registration of real estate credit intermediaries and lenders that operate or are going to operate exclusively with borrowers domiciled within the territorial scope of a single Autonomous Community shall correspond to the competent body of said Autonomous Community, provided that the headquarters of its central administration is located in the same.

Credit institutions and Spanish branches of foreign credit institutions providing services subject to Law 5/2019 are exempted from the obligation to register, as they are already authorized and registered in their condition of credit institutions.

Leveraged lending

In case of leverage lending, it is important to bear in mind the issue of any potential financial assistance. For more information, see Giving and taking guarantees and security. 

Generally

Loan agreements and other finance documents are subject to general contractual legislation and principles, such as the following:

• Section 36 of the Contract Act 1915 (Avtalslagen), the general clause, gives the courts the ability to modify or set aside a contractual provision if the court deems the clause unreasonable. The threshold for the application of the general clause is, however, quite high.
• Section 31 of the Contract Act 1915, a provision against usury (or the practice of lending money at unreasonably high rates of interest), if applicable, will cause the affected clause or contract to be ruled as invalid.
• A contractual provision may, in accordance with general contractual principles, be modified or set aside if it is deemed to be inconsistent with one party's basic assumptions in relation to the contract, even if it is due to events subsequent to the conclusion of the contract.

Specific types of lending

An issue specific to the area of mortgage lending is whether a lender falls within the recently formed Swedish mortgage regime. The Mortgage Credit Directive, implemented in Swedish law mainly through the Act on Mortgage Credit Activities 2016 (Lag (2016:1024) om verksamhet med bostadskrediter), aims to prevent the irresponsible lending and borrowing practices that were exposed during the global financial crisis. The Mortgage Credit Directive applies to first and second charge mortgages. It imposes a number of requirements on lenders including the need to:

• conduct affordability tests before lending;
• provide standard information about the mortgage to enable borrowers to compare products; and
• ensure that staff are suitably trained.

Standard form documentation

Most Swedish law syndicated finance transactions are governed by documentation based on recommended forms published by the Loan Market Association (LMA). In general, the documentation has been adopted for Swedish purposes and is not as comprehensive as the English law equivalents. Bilateral finance transactions are more likely to be documented on bank standard form documentation prepared in-house.

Generally

Loan agreements and other finance documents are subject to specific provisions under the Civil and Commercial Code of Thailand.

Agreements are also subject to general contractual principles, rules regarding excessive interest rates and consumer protection law. In certain circumstances, breach of these rules is a criminal offence.

As noted above, if the business operator providing lending as non-banks is a foreign majority owned company, a foreign business license/certificate is needed to be granted by the Ministry of Commerce.

Standard form documentation

There is no legally required standard form documentation.

While it has become common practice to use the standard form loan agreements recommended by the Asia Pacific Loan Market Association (APLMA), it is prudent for such forms to be amended by a Thai-qualified lawyer as there are material concepts and provisions in the APLMA forms which are not recognized or suitable under Thai law.

Cross-border loans

After liberalization of the Ukrainian currency market, effectiveness and validity of the cross-border loans (and amendments thereto) between foreign lenders and Ukrainian borrowers is no more linked to their registration with the National Bank of Ukraine. Instead, the bank servicing the cross-border loan notifies the National Bank of Ukraine on the loan in the automatic information system. The mandatory interest cap rates were also cancelled, so the parties have more flexibility in agreeing terms of financing.

Specific types of lending

Ukrainian legislation provides special requirements for specific types of lending, for example, consumer lending.

The Law of Ukraine ‘On Consumer Lending’ dated 10 June 2017 introduced specific requirements in respect of the following.

Promotion and origination of loans

• Advertisements for consumer lending must indicate all service fees and expenses.
• Consumers must be informed of fees and costs of third parties, including insurance companies and valuers.
• Compulsory assessment of borrower's affordability is also a requirement.

Administration and repayment of loans

• Outstanding principal amounts shall be repaid first.
• Outstanding interest and principal payments shall be repaid second.
• Default interest and penalty amounts shall be repaid third.

Standard form documentation

Loan Market Association (LMA) standard documentation is predominantly used for cross-border lending, but this is uncommon in local transactions.

Bail-in

Ukrainian legislation sets out bail-in arrangements which give a regulator special powers to make a conversion or writing down of a bank's liabilities to its related parties (and in some circumstances to non-related entities) by way of exchange of additionally issued shares in the amount of unencumbered monetary liabilities owed by the bank to its related parties. Bail-in legislation applies only to banks under local law.

Generally

Loan agreements and other finance documents are subject to general contractual principles. For example, the England & Wales courts will not enforce a penalty and so lenders have to be careful about the rate of default interest charged on a loan. Lenders therefore tend to opt for a modest uplift of around 2% above the usual rate.

Specific types of lending

Specific to the area of mortgage lending is the issue of whether a lender falls within the recently formed UK mortgage regime. The Mortgage Credit Directive, implemented in the UK through a series of primary and secondary legislation, aims to prevent the irresponsible lending and borrowing practices that were exposed during the global financial crisis. The Mortgage Credit Directive applies to first and second charge mortgages. It imposes a number of requirements on lenders including the need to:

• conduct affordability tests before lending;
• provide standard information about the mortgage to enable borrowers to compare products; and
• ensure that staff are suitably trained.

Standard form documentation

Most English law syndicated finance transactions are governed by documentation based on recommended forms published by the Loan Market Association (LMA). Bilateral finance transactions are more likely to be documented on bank standard form documentation prepared in-house.

Generally

Loan agreements and other finance documents are subject to general contractual principles. For example, the Scottish courts will not enforce a penalty and so lenders have to be careful about the rate of default interest charged on a loan. Lenders therefore tend to opt for a modest uplift of around 2% above the usual rate.

Specific types of lending

Specific to the area of mortgage lending is the issue of whether a lender falls within the recently formed UK mortgage regime. The Mortgage Credit Directive, implemented in the UK through a series of primary and secondary legislation, aims to prevent the irresponsible lending and borrowing practices that were exposed during the global financial crisis. The Mortgage Credit Directive applies to first and second charge mortgages. It imposes a number of requirements on lenders including the need to:

• conduct affordability tests before lending;
• provide standard information about the mortgage to enable borrowers to compare products; and
• ensure that staff are suitably trained.

Standard form documentation

Although not a regulatory requirement, most Scots law syndicated finance transactions are governed by documentation based on recommended forms published by the Loan Market Association (LMA). Bilateral finance transactions are more likely to be documented on bank standard form documentation prepared in-house.

 

Financial assistance

Under the Companies Law it is not possible for a public joint-stock company (PJSC) target, or any of its subsidiaries, to provide any financial aid (such as loans and guarantees) that will assist a purchaser in acquiring its shares. However, limited liability companies are exempt from such restrictions under Ministerial Resolution No. 272 of 2016 on the Implementation of Certain Provisions of the PJSC to LLCs.

Standard form documentation

Most syndicated finance transactions are governed by documentation based on recommended forms published by the Loan Market Association. Bilateral finance transactions are more likely to be documented on bank standard form documentation prepared in-house.

Generally

Federal and state laws prohibit lenders from charging an unreasonably high interest rate or other unreasonable fees. Lenders who violate usury laws may incur civil or criminal penalties.

Standard form documentation

Credit agreements in the US are typically based on the agent’s or lead lender’s standard form. This may incorporate language recommended by the Loan Syndications and Trading Association, but there is no standard form documentation.