Secondary debt trading—timeline of a typical trade
Produced in partnership with K&L Gates
Secondary debt trading—timeline of a typical trade

The following Banking & Finance guidance note Produced in partnership with K&L Gates provides comprehensive and up to date legal information covering:

  • Secondary debt trading—timeline of a typical trade
  • Timeline of a typical secondary debt trade
  • Pre-trade date: KYC, confidentiality and due diligence
  • Trade date: the trade takes place and is binding
  • T + 1 day: seller requests third party consents
  • T + 2 days: sending the trade confirmation and third party consents
  • T + 3 days: reviewing the trade confirmation
  • T + 4 days: trade confirmation is agreed or discrepancies are raised
  • T + 5 days: transaction documentation
  • T + 7 days: third party consents obtained
  • more

The timeline outlined below is an indicative time-frame incorporating the various steps required through the process of a typical secondary debt trade. The process is similar for trading of par debt and distressed debt although the table below highlights certain specific differences between the two types of trade. This timeline has been produced on the assumption that the Loan Market Association (LMA) secondary debt trading suite of documents will be used by the parties to document their trade.

For more information on the documentation for secondary debt trades, see Practice Note: Overview of the key documentation in a typical secondary debt trade.

Timeline of a typical secondary debt trade

T = Trade date

All references to days are to business days

Day Action
Pre-trade date • The buyer and seller identify their respective counterparty and satisfy their respective ‘know your customer’ (KYC) checks
• The buyer and seller enter into confidentiality arrangements
• The seller sends information about the asset which is being traded to the buyer including copies of the underlying credit agreement
• The buyer and seller carry out their due diligence in relation to the trade
Trade date