Loan Market Association updates its recommended secondary trading documentation

Loan Market Association updates its recommended secondary trading documentation

Banking & Finance analysis: What do lawyers need to know about the recent updates to the Loan Market Association’s (LMA) secondary trading suite?

Original news

Revised versions of the LMA’s Trade Confirmations, Standard Terms and Conditions, Participation Agreements and Secondary Debt Trading Users Guide have been issued and are available on the pending page of the LMA website. The revised documents will go live on 16 December 2015. Similar changes had previously been proposed on 14 October 2015, but the updated documents never became ‘live’, owing to comments received by LMA members.

Why have these changes been made?

The changes to the documentation which have now been announced have been made to take account of the decision of the Supreme Court in Tael One Partners v Morgan Stanley & Co International plc [2015] UKSC 12,[2015] All ER (D) 112 (Mar) and to clarify and provide guidance on the scope and application of a number of other provisions in the documentation.

Which documents have been updated?

The LMA has updated the following documents:

  • Users Guide
  • Trade Confirmation (Bank Debt)
  • Trade Confirmation (Claims)
  • Trade Confirmation (Risk Participation)
  • Standard Terms & Conditions for Par and Distressed Trade Transactions (Bank Debt/Claims) (Standard Terms and Conditions)
  • Master Funded Participation Agreement (Par/Distressed)
  • Master Risk Participation Agreement (Par)
  • Funded Participation (Distressed/Claims)
  • Funded Participation (Distressed/Par)
  • Risk Participation (Par)
  • Risk to Funded Participation (Par)
  • Funded/Risk Participation (Par)

These documents are available to LMA members on the pending section of the LMA website here and will become 'live' documents on 16 December 2015.

Capitalised terms have the meanings given to them in the LMA’s Standard Terms and Conditions, unless otherwise specified.

What are the main changes to the documentation?

Clarifications resulting from the court’s decision in Tael One

In Tael One, the Supreme Court considered whether a Seller was entitled to recover from the Buyer a portion of a payment premium that was

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About the author:

Miranda is a solicitor specialising in leveraged and acquisition finance. She trained at Hogan Lovells International LLP and qualified into the international banking and finance team. During her time at Hogan Lovells she worked on a variety of domestic and cross-border transactions, acting for both borrowers and lenders. She also experienced secondments to Barclays Bank PLC and Kaupthing Bank hf.