SENEGAL Law and Practice Contributed by: Claudy Monja and Mampionona Razafimamonjy, John W Ffooks & Co
3.1.7 Intercreditor Arrangements Under local law, there are no material restrictions or requirements imposed on intercreditor arrangements. 3.1.8 Syndicated Loans The concept of agency and the role of an agent under a syndicated loan have been recognised by the reform of the Uniform Act on Securities since 2010. 3.1.9 Debt Subordination The method of debt subordination is permissible and recognised for debts contracted by the liquidator at the time of liquidation of the bankrupt company. The Uniform Act on Insolvency gives the liquidator the possibility to reimburse the debts of the commitments the liquidator had to make during the liquidation of a bankrupt company. 3.1.10 Transfer/Assignment of Debts Under Foreign Laws The transfer/assignment of debts under foreign laws is permitted. However, the air transport licence (eg, held by the lessee) is neither assignable nor transferable. The contracts for the assignment of receivables are registered in Senegal with the tax authorities at 1% of the contract amount. 3.1.11 Usury/Interest Limitation Laws The legal interest rate is set each year by the Minister of Finance and Budget. For the year 2024, this rate has been set at 5.0336%, as per Order No 002349 MFB/DGSF/DMC/DER/an dated 2 February 2024. (In 2022, the rate was 4%.) 3.2 Security 3.2.1 Typical Forms of Security and Recourse The typical forms of security and recourse that would be granted in an aviation finance transaction domes - tically are mortgages and guarantees in accordance with the Uniform Act on Securities and national law. 3.2.2 Types of Security Not Available It is not possible to set up pledges over aircraft or related movable assets such as engines, as they are only subject to mortgages.
3.2.3 Trust/Trustee Concepts The concept of a trust and the role of a security trustee are recognised under OHADA law. 3.2.4 Assignment of Rights to an Aircraft by a Borrower to a Security Trustee The law is silent on the assignment of rights to an aircraft by a borrower to a security trustee; however, it is believed this is impossible because of the risk of conflict of interest. However, the borrower is permitted to assign its rights over the aircraft or under an aircraft lease to a third party, pursuant to a security assign - ment or a mortgage. 3.2.5 Assignment of Rights and Benefits Without Attendant Obligations It is possible for someone to assign a credit that they own, including the credits that a lessor is entitled to under an aircraft lease, such as the rents resulting from that agreement. However, during the term of the leasing contract, the lessor may only transfer all or part of its rights under the lease agreement to another undertaking engaged in lease or debt-collection activ - ities. The lessor is obliged to notify the lessee of the transaction by a deed with a definite date. The trans - feree is obliged to respect the contract concluded by the transferor. The lessee may not assign its contractual right of use and may not sublet the leased asset without the writ- ten consent of the lessor. The assignor will guarantee the lessor the perfor - mance by the assignee of its duties as provided in the law and stipulated in the lease agreement. The duration of the sublease agreement may not exceed the duration of the lease agreement. 3.2.6 Choice of Foreign Law Security assignments or guarantees governed by English or New York law are permitted and enforce - able. The parties are free to choose the law governing their contract.
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