Parallel Loan Agreement meaning

In this issue: Property (Digital Assets etc) Act 2025 Lending Aviation finance Shipping finance Real estate property Sustainable finance Derivatives Regulation for derivatives Regulation for banking lawyers New and updated content Useful information Property (Digital Assets etc) Act 2025 Property (Digital Assets etc) Act 2025 comes into force The Act clarifies which things can be recognised as objects of personal property rights, ensuring they are not excluded from such treatment. It took effect on 2 December 2025. Source: Property (Digital Assets etc) Act 2025. Lending LMA publishes note clarifying deed requirements and intercreditor documentation The Loan Market Association (LMA) has assessed the impact of obiter observations in Macdonald Hotels v Bank of Scotland [2025] EWHC 32 (Comm), which raised doubt over whether a particular testimonium clause—akin to those in the LMA’s recommended intercreditor agreements—sufficiently demonstrates, on the face of the document, an intention for it to take effect as...

Banking & Finance—July 2025 case round-up Ciddy Ltd v Natalia [2025] EWHC 1616 (Ch) Loan agreement—unenforceable penalty clause The Chancery Division dismissed the bankruptcy petition presented by the petitioner, Anjana Natalia, against the debtor, Ms Ella Vacani. The petitioner sought to recover £657,516.32 said to arise from a loan contract, asserting that the debtor, a professional accountant, had taken legal advice before signing. The debtor, by contrast, maintained that the parties’ relationship was unfair because of unequal understanding, coercive control exerted by her husband, and an excessive default interest rate that, she said, constituted an unenforceable penalty clause. The court identified substantial grounds to challenge the petition, grounded in the debtor’s allegations of an unfair relationship under the Consumer Credit Act 1974 and a penalty default term within the agreement. It held that the issues concerning default interest and unfairness were not fanciful and ought to be determined by the County Court. Accordingly, any sums due to the petitioner, if any, remain to be established in separate...

This Practice Note forms part of the Lexis+® UK Corporate private equity buyout transaction toolkit. Timing Due diligence is typically undertaken after heads of terms are signed and confidentiality arrangements are in place. It then proceeds in parallel with negotiation of the main sale documents (share purchase agreement and associated ancillary papers) and the equity documents (investment agreement, senior debt (loan facility) agreement and, if required, loan note instruments). Most diligence is carried out early in the deal to enable the parties to agree suitable warranty and/or indemnity protection in the formal papers, and to support the seller’s and target management’s disclosures against their respective warranties. Disclosure letters are drafted and negotiated alongside the share purchase agreement and the investment agreement, and executed at the same time as those instruments. A first draft disclosure letter is usually produced only once diligence is well progressed and initial drafts of the relevant documents have already been circulated. What happens during this phase? Due diligence The private...

What is a security agent? The security agent plays a pivotal role in syndicated transactions. In a syndicated loan, the security agent (often referred to as the ‘security trustee’) holds the transaction security on trust for the lenders and any other secured creditors, including hedging counterparties. Although commonly labelled a security agent, the function is not an agency role but a trusteeship. Using a trust structure to hold the transaction security offers significant benefits in syndicated lending, where the creditor group usually shifts over time as lenders transfer their loans to new lenders (see Practice Note: Introductory guide to loan transfers). The key advantages are as follows: the trust structure removes the need for security to be granted separately to each creditor, which can be costly and time‑consuming; and the security is vested in the security trustee for the benefit of the existing secured creditors and any parties that become secured creditors in future. This means that as the make-up of...

Abandon Describes a situation where the contractor halts performing the works for an extended, uninterrupted span of days (eg 20 business days) or for a greater aggregate of non-consecutive days (eg 60 business days) across the project’s duration or within a stated timeframe (eg 12 months), doing so wilfully and without justification at any stage of delivery or execution. Abandonment is ordinarily treated as a contractor default, enabling the Authority to terminate the Project Agreement and/or permitting Project Co to end the construction contract immediately for cause. Acceptance Tests Tests carried out to confirm whether the facility (or another project asset) achieves the standards required for the Authority to deem facility complete and accept it. Access Protocol The protocol that Project Co must follow in order to obtain access to the buildings forming part of the project at any time during the term. For instance, on a social housing scheme or a school, prerequisites would have to be satisfied by Project Co before...