Upstream Loan Agreement

Interest Interest Are interest most often calculated from a bank base rate or a reference variable rate (. B for example LIBOR, EURIBOR or HIBOR)? If the latter, what is the most commonly used reference rate in your jurisdiction? U.S. credit contracts often offer borrowers the ability to calculate interest rates from a base rate based on the bank`s key rate or libor. The selection of the LIBOR rate usually results in an overall interest rate lower than the base rate, but requires pre-reporting to lenders to borrow under the loan agreement (normally at least two business days). In addition, a libor “soil” is generally included in the loan agreement, which sets a minimum libor rate, usually between 0% and 1%. On the other hand, basic rate loans are generally available in the short term, sometimes on the same day, and can be paid at any time in advance without a break financing fee. In some states (for example. B Florida), the entry of a borrower into a loan document may, in addition to the applicable reporting fee, result in a documentary tax within the meaning of state law. Here, too, there is a margin of appreciation for value valuation. Obviously, if there is no intention that the borrower will ever be obliged to repay the loan, the loan will probably be a distribution.

So we`re really back where we were before the 2017 guideline, but with some very useful reminders of good practices in determining the legality of guarantees and intragroup loans. Document taxes and stamp duty Are they taxes, stamp duty or other taxes payable when granting a loan, guarantee or security interest rate or its application? As a general rule, federal and New York state law do not charge taxes or fees related to the granting of credits or the granting of a securities interest rate or guarantee. However, the notifications required to enhance the lender`s security interests (p.B. UCC-1 financing pieces, applications filed with the U.S. Copyright Office or the U.S. Patent and Trademark Office to enhance security interest in U.S. intellectual property and government mortgage applications) typically require payment of a royalty. Syndication Are syndicated secure credit facilities typical of your jurisdiction? Yes, syndicated lending facilities are common in the United States.

Almost all large companies use syndicated credit markets for bank financing. Is well-established market facility documentation used in your country for secured credit transactions? Unlike the United Kingdom, for example, there is no well-established standard documentation in the United States for secured business lending facilities. While some provisions are generally included in loan contracts, loan contracts are usually negotiated on an agreement-by-deal basis. What is their genesis? Guarantees are created by contract, either by provisions of the loan agreement or, more generally, by a separate guarantee made by the surety. As a general rule, no notification is required to create an enforceable warranty. However, if the surety grants an interest in its securities assets (which is usually the case with a collateral-backed loan transaction), other measures are necessary to enhance a security interest in the security of the surety`s assets. When granting the loan, directors must ensure that it is in the subsidiary`s best interest to provide an interest-free loan – the broader in-kind benefits described above, such as sustainability within the broader group, can rightly be taken into account. Since a surety does not receive the proceeds of the loan it has secured, the guarantees in the bankruptcy court may be called into question as constructive fraudulent promotions because the surety did not receive a reasonable equivalency value in exchange for its guarantee. With respect to downstream guarantees, the courts have generally held that there is no fraudulent transfer, as it is considered