Powered by Lexis+®
Jurisdiction(s):
United Kingdom
Related legal acts
View More View Less

Loan and convertible loan notes in corporate transactions: issue, conversion, transfer, interest, redemption, security, guarantees, governance and public offer and stamp duty rules (England and Wales)

Practice notes
imgtext

This fundamentals note explores core features of loan notes that might be issued by a private limited company formed in England and Wales.

What is a loan note?

A loan note is a type of debt instrument issued by the debtor (the issuer) that gives the noteholder (the lender) a right to receive principal and interest on the agreed amount. It evidences borrowing by the issuer from the holder.

Interest under a loan note is usually payable for a fixed period, ending on a date when the full borrowing—namely the principal of the note together with any interest accrued to that point—must be repaid in full on the scheduled repayment date.

What is a convertible loan note?

A convertible loan note is a loan note capable of being converted into another class of security of the issuer, typically shares.

Convertible loan notes provide investors with flexibility over their exposure to a company and commonly allow them, in exit situations, to elect either repayment or conversion, enabling investors to choose the route that delivers the strongest return on the eventual realisation of their investment.

How are loan notes created/issued?

A loan note is brought into being and issued pursuant to the...

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.
Web page updated on 21/05/2026

Popular documents

When evaluating a general damages claim, the practitioner ought initially to refer to the Judicial College Guidelines (JCG)...

Read More Right Arrow

This Practice Note This Practice Note reviews mechanisms used in settling litigation. A Tomlin order consists of a consent order paired with a schedule. It operates to stay proceedings on terms that have been agreed. The provisions contained in the schedule may remain confidential. This Practice Note describes the scope of confidentiality attaching to the schedule and sets out how it differs from a standard consent order. Sample wording for a Tomlin order is included, alongside links to precedents, as well as guidance on court approval. It also addresses varying, setting aside and enforcing a Tomlin order, including the considerations the court will take into account when handling applications for each. Further guidance is provided on interpreting and applying the relevant provisions of the CPR; however, some courts and divisions impose very specific requirements for both drafting and approval, and for approaching the schedule and confidentiality issues. Accordingly, you must consider the particular rules and court guide provisions in the forum where your claim is proceeding when drawing up the Tomlin order...

Read More Right Arrow

Date [ date ] Parties [ name of Landlord ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Landlord) [ name of Tenant ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Tenant) [ [ name of Guarantor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Guarantor) ] [ [ name of Mortgagee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Mortgagee) ] Definitions Within this Deed, the terms below shall be interpreted as follows: [ Annual Rent • the annual sum reserved under the Lease; ] [ Insurance Rent • the Tenant’s share of the Landlord’s costs of insuring the Property (as set out in the Lease); ] Lease • the lease of the Property dated [ date ], entered into between (1) [ the Landlord OR [ name ...

Read More Right Arrow

I, [ name ], of [ address ], solemnly and sincerely state that: [ Matters to be verified, set out in numbered paragraphs ] I make this solemn statement in good conscience, believing it to be true, and pursuant to the provisions of the Statutory Declarations Act 1835. DECLARED at [ details ] this [ day ] day of [ month and year ] Before me ................................................................................ [ signature of the person before whom the declaration is made ] A [ commissioner for oaths OR [ solicitor OR [ insert other qualification ] ] authorised to administer oaths ]...

Read More Right Arrow