Jurisdiction(s):
United Kingdom

Key definition

Secondary loan market definition

What does Secondary loan market mean? The market in which existing lenders and investors buy and sell outstanding loan exposures after origination, rather than at primary syndication with the borrower or issuer. It is a descriptive market term (not defined in legislation or case law) used across leveraged finance, real estate finance, infrastructure and restructuring. Key legal features include: - Transfer mechanics: assignment or novation (England & Wales and Northern Ireland); assignation in Scotland (perfection by intimation to the borrower or registration in the Register of Assignations); and sub-participation or risk participation where transfer restrictions apply. - Documentation: typically based on Loan Market Association (LMA)...

Practitioners’ guide to LMA par and distressed secondary loan trading: settlement, Delayed Settlement Compensation, BISO, interest, transfers/participations, representations, indemnities, tax and insolvency termination

Published by a LexisNexis Banking & Finance expert

Practice notes

STOP PRESS:

The Loan Market Association (LMA) has issued revised and updated editions of the standard terms and conditions for Par and Distressed Trade Transactions, the complete set of Funded Participation and Risk Participation Agreements, and the Secondary Debt Trading Documentation User Guide, effective from 17 March 2026. Changes comprise the elimination of LIBOR mentions, updates to IBOR rate definitions and to the Target2 definition, together with refreshed ERISA representations that incorporate further exemptions to the prohibited transaction rules under ERISA and the US Internal Revenue Code. These materials are available solely to LMA members via the LMA’s Documentation Hub. In London, secondary debt trades are generally recorded using recommended-form documents produced by the Loan Market Association (LMA), and this Practice Note proceeds on the basis that the parties to the secondary trade have agreed to use those forms for documenting their transaction. For further detail and context, please see Practice Note: Overview of the key documentation in a typical secondary debt trade. The LMA has also released a Guide to secondary loan market Transactions and a Guide to Claims Trading, both accessible to subscribers on the LMA website...

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Jacqui Allen

Mandel, Katz & Brosnan LLP

Jacqui Allen heads the London office of Mandel Katz & Brosnan. Jacqui's practice focuses on the secondary loan trading markets and providing advice on the legal issues relating to the purchase and sale of distressed assets. Jacqui has been actively involved in the loan trading market since 1997 and has had extensive experience in various types of high-yield transactions throughout the world, including the purchase and sale of distressed and par loans, trade claims and loan restructurings. In addition, Jacqui concentrates on representing banks, hedge funds and other financial institutions that purchase and sell distressed assets in emerging and established markets in Europe, Asia and Australia....

Web page updated on 21/05/2026

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