Reviewing local law security documents
Reviewing local law security documents

The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:

  • Reviewing local law security documents
  • Acting for the borrower/sponsor
  • Acting for the lenders
  • Signing and perfection

Local counsel are frequently instructed to draft local law security documents on acquisition finance transactions. This can occur where a group company in another jurisdiction grants security over its assets or where an English company owns assets located in another jurisdiction, see Practice Note: Instructing and managing local counsel.

Security documents (other than those governed by English law), will normally be drafted by local counsel for the lenders and checked by the lenders' main counsel before being reviewed by local and main counsel acting for the sponsor/group.

Guarantors (including guarantors in other jurisdictions) will normally sign up to the facilities agreement as a guarantor and the guarantee itself will be contained in the facilities agreement (see Practice Note: Acquisition finance—facilities agreement).

This note discusses:

  1. reviewing local law security documents as main lawyers for the sponsor/group

  2. reviewing local law security documents as main lawyers for the lenders

  3. signing and perfection issues

For information on security and guarantees in acquisition finance transactions, see Practice Note: Security and guarantees on acquisition finance transactions. For an introductory guide to acquisition finance, see Practice Note: Acquisition finance—introductory guide and for a glossary of commonly used terms, see: Acquisition finance glossary—overview.

Acting for the borrower/sponsor

Agreed security principles

On most cross-border transactions, the parties will agree a set of security principles at the term sheet stage.