SERBIA Law and Practice Contributed by: Uroš Popović and Stefan Golubović, Drašković Popović & Partners
3.1.8 Syndicated Loans The concept of agency and the role of an agent (such as the facility agent) under a syndicated loan is rec - ognised in Serbia. 3.1.9 Debt Subordination All valid debt subordination methods are permissible and recognised. 3.1.10 Transfer/Assignment of Debts Under Foreign Laws It is possible to transfer or assign all or part of an outstanding debt under an English or New York law- governed loan. 3.1.11 Usury/Interest Limitation Laws There is no specific limit as to the amount of con - tractual interest that may be envisaged. However, the court is entitled to reduce the amount of interest upon a party’s request if it assesses it is exceedingly high. The assessment is performed on a case-by-case basis. 3.2 Security 3.2.1 Typical Forms of Security and Recourse Typical forms of security and recourse granted in an aviation finance transaction in Serbia include promis - sory notes, pledges and bank guarantees. 3.2.2 Types of Security Not Available All security types under the law may be taken over an aircraft or related collateral such as engines, warran - ties or insurances. 3.2.3 Trust/Trustee Concepts The concept of a security trustee exists under Serbian law. However, the trustee should be registered as a security trustee in the relevant register. 3.2.4 Assignment of Rights to an Aircraft by a Borrower to a Security Trustee The assignment of rights and obligations under the lease of aircraft is possible. However, any change on the side of the lessor will have to be reflected in the lease agreement (ie, the lease agreement should be annexed to reflect the change). If the lease agreement is registered with the Aircraft Register, the data in the Aircraft Register will need to be changed.
tion on the Unification of Certain Rules relating to the Precautionary Arrest of Aircraft.
3. Aircraft Debt Finance 3.1 Structuring 3.1.1 Restrictions on Lending and Borrowing In line with Serbian regulations, only banks are entitled to issue financial loans. Borrowers are entitled to use the loan in line with agreed loan terms. 3.1.2 Effect of Exchange Controls or Government Consents In particular cases envisaged under the FX rules, the National Bank of Serbia should be notified of the financing or repatriation of realisation proceeds under a loan, guarantee or security document. 3.1.3 Granting of Security to Foreign Lenders Borrowers are permitted to grant security to foreign lenders subject to certain FX restrictions. 3.1.4 Downstream, Upstream and Cross-Stream Guarantees Downstream, upstream and/or cross-stream guaran - tees are permitted in favour of lenders when they are made in line with the FX rules. In specific cases envis - aged under these rules, the National Bank of Serbia should be notified of the guarantees being issued. 3.1.5 Lenders’ Share in Security Over Domestic SPVs Whether a lender should take share security over a domestic special purpose vehicle that owns the financed aircraft is a business decision. However, gen - erally speaking, the action will be advised. A pledge of shares is recognised under Serbian law. 3.1.6 Negative Pledges Negative pledges are recognised under Serbian law. 3.1.7 Intercreditor Arrangements Intercreditor arrangements may be made. However, these arrangements are only effective between the creditors who concluded the arrangements.
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