Jurisdiction(s):
United Kingdom

English law LMA par secondary loan trades: pre-trade due diligence and settlement guide (transfer criteria, RFR/IBOR interest and DSC, KYC, tax, regulatory, sub-participations, BISO)

Published by a LexisNexis Banking & Finance expert

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The Loan Market Association (LMA) has released refreshed 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, with effect from 17 March 2026. The changes remove LIBOR references, update IBOR rate definitions and the Target2 definition, and revise ERISA representations to incorporate additional exemptions to the prohibited transaction rules under ERISA and the US Internal Revenue Code. The revised documentation is available exclusively to LMA members, accessible via the LMA’s Documentation Hub. These publications are updated versions issued by the LMA.

Summary

A core principle of trading under the LMA protocol is that ‘Trade is a Trade’; i.e. once a trade is struck—including an oral contract agreed by telephone—it is binding, and subsequent developments, even if adverse to one or both parties, do not entitle either party to cancel or ‘break’ the trade. By way of example, a failure to secure consent for an assignment or novation of the debt does not mean the trade is broken...

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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 20/05/2026

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