Export debt definition

View the related practice notes about Export debt

Export debts—choice of law rules and the assignment of debts

This Practice Note summarises the issues raised in relation to the English law and EU choice of law rules relating to the voluntary assignment of receivables (also known as debts) in the context of receivables financing whether by way of an outright assignment or an assignment by way of security. For the sake of simplicity, this Practice Note refers to outright assignments only but the principles apply equally to assignments by way of security.Exposure to export debts has historically been mitigated by spread, the reasonably modest amounts in question and debt'>export debt concentration covenants. However, as receivables financiers develop cross-border ambitions and enter into increasingly material financings, these historical approaches should be modified to mitigate against potentially significant exposures to non-UK receivables.There are potential risks involved with taking an assignment of export debts, the most obvious of these risks is that the assignment is open to challenge by a debtor in a collect-out. As between cross-border parties, appropriate local law advice must be sought to ascertain whether there may be any challenges to the debt being validly transferred and as to the procedures by which the transfer was effected under the applicable law.A receivables purchaser should ensure that:•it has valid title to the receivables which it purchases, and•it is able to collect those

Key concepts and terminology in receivables finance and asset-based lending

Key concepts and terminology in receivables finance and asset-based lending This Practice Note explains the key concepts and terminology used in receivables finance and asset-based lending. It covers: • the terminology surrounding the key parties in receivables finance and asset-based lending in Parties—terminology • the key types of facility and documentation used in receivables finance and asset-based lending transactions • the key terminology in receivables finance and asset-based lending • the key legal concepts in receivables finance and asset-based lending being assignment, fixed and floating charges, retention of title and cross border issues, and • key cases Parties—terminology In the UK, a receivables facility is typically structured as a receivables purchase facility which can either take the form of an invoice discounting facility or a factoring facility (see Practice Note: Invoice discounting and factoring). It is also possible to provide a loan secured against the value of receivables but this is much less common in the UK. There are fundamental differences between buying receivables and lending against the security of receivables (see Practice Note: Distinguishing between lending against the security of receivables and purchasing receivables). Asset-based lending involves the provision of a receivables financing as the core facility, together with one or more other facilities where the advance is calculated by reference to the value of each relevant asset class (eg inventory, plant and machinery and/or real estate). Asset-based lending can often be a hybrid structure