Cross Border Loan Agreements

Has. Offshore equity funds. For example, a lender often requires a promise of shares from a holding company that is ultimately owned by the borrower. This type of seizure of shares can be structured so that an entity organized in a safe jurisdiction can mortgage the actions of the holding company, which is also organized in a safe jurisdiction, in accordance with a pledge document submitted to the laws of a safe court. Such a promise, duly structured and controlled with the local consultant, is a powerful instrument for a lender that allows a lender to enforce the commitment and either sell the borrower as a current business to repay the loan, or to force a management replacement. In the case of such collateral, it is important to ensure that the borrower`s jurisdiction recognizes the modification of the property resulting from the performance of such collateral in accordance with its foreign ownership rules. In preparing for such a commitment, it is important to carefully review the enforcement procedures to ensure that the commitment can be implemented as much as possible, without depending on the cooperation or activity of the borrower, its shareholders or its directors. Another remarkable development has been Thailand`s security interest regime. The implementation of the Business Security Act BE 2558 (2015) (BSA) broadened the category of assets that could be considered a guarantee and also resolved some problems related to the use of certain types of assets as collateral. The BSA therefore offers Thai borrowers more opportunities for access to financing and gives lenders more effective security rights. However, this security regime cannot currently be used in many cross-border financings, as foreign banks are only considered beneficiaries of BSA securities if they are lenders in a union facility alongside a Thai commercial bank. The current legislation.

The starting point is the choice of the current law of a loan contract, since it determines whether a contract is valid and how the terms of the contract should be interpreted in the event of a dispute. In the past, the current legislation of most credit contracts for international transactions was either New York or English. This is mainly due to the fact that these laws are considered sophisticated, stable and predictable, which lenders like. In addition, lenders generally prefer not to have a contract subject to the right of a foreign borrower, since the pro-borrower legislator could amend the law in a manner detrimental to the lender (risk of legal reform). In each cross-border transaction, credit lawyers ensure that the choice of existing legislation is applicable in the borrower`s jurisdiction, and that they are often covered by a legal opinion issued at the end of the year.