Case studies

"We couldn't do as good a job as we do without it. LexisNexis gives us the security and confidence that we are best serving our clients because the information we are working on is the most accurate we can get"

Avensure

Access all 1 documents on Parallel Loan Agreement

GET ACCESS NOW

GLOSSARY

Parallel Loan Agreement definition

Published by a LexisNexis Banking & Finance expert

What does Parallel Loan Agreement mean?

An agreement between Project Co and the Construction Contractor or FM Contractor or their parent company which is outside the Construction Contract or FM Contract and is aimed at circumventing the prohibition on 'pay when paid' under Housing Grants, Construction and Regeneration Act 1996 as amended by the Local Democracy, Economic Development and Construction Act 2009.

Speed up all aspects of your legal work with tools that help you to work faster and smarter. Win cases, close deals and grow your business–all whilst saving time and reducing risk.

Parallel loan agreements in PFI/PF2 projects

This Practice Note looks at parallel loan agreements in PFI and PF2 projects. It considers the background to such agreements (arising out of the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996)) and at the purpose and contents of the parallel loan agreement itself.Note that in the 2018 Budget (delivered on 29 October 2018), it was announced that the government will no longer use PFI or PF2 on new projects (see News Analysis: Budget 2018—what does it mean for infrastructure and housebuilding?). Existing PFI and PF2 projects will continue to run.Background to parallel loan agreementsTo understand what a parallel loan agreement is requires an understanding of the legislative background that gave rise to them.The HGCRA 1996 extends to all 'construction contracts', as defined by the HGCRA and provides a statutory regime which must be adhered to by the parties to a construction contract in relation to payment and adjudication (see Practice Note: Introduction to the HGCRA 1996). Section 113 of the HGCRA 1996 prohibited 'pay when paid' clauses. 'Pay...

Discover our 1 Practice Notes on Parallel Loan Agreement