AUSTRIA Law and Practice Contributed by: Markus Fellner, Stefan Sallat and Florian Henöckl, Fellner Wratzfeld & Partner Rechtsanwälte GmbH
prohibits the disclosure of customer data by banks to third parties; exceptions apply (eg, for the conduct of legal disputes with a borrower or for the purposes of certain investigations by authorities) but these will generally not apply to performing loans. Waiver and consent language – inter alia, permitting disclosure of information on a loan and lender to a potential syn- dicate partner or assignee – is therefore frequently used in non-consumer loans and is standard market practice for loans designed for syndication. Since this is not a satisfactory structure in practice (in particular, with respect to performing loans), the entirety of any rights and obligations arising from a loan agreement may be transferred by way of trans- fer of contract ( Vertragsübernahme ); such transfer requires the consent of all parties involved. It is cus- tomary, however, that the loan documentation con- tains the relevant in-advance consent of the borrower, which is permissible under certain circumstances. Austrian law-governed security rights will typically transfer alongside the underlying legal relationships (and statuary law provides for a claim of the new lend- er to have any such security rights transferred from the former lender). Specific to Austrian law is the possibility of a new creditor, with the consent of the borrower, redeem- ing outstanding debt with the former creditor thereby causing (against payment) an ex lege transfer of any related security rights. This would, however, require that any such outstanding payments that are due, as a result this redemption ( Einlösung ) structure would typically not be a viable option in relation to perform- ing loans. The method is frequently used in restructur- ing scenarios because it permits the swift and secure transfer of security rights. By way of an alternative, Austrian law would also per- mit risk transfer structures not resulting in a transfer of the position of the lender of record (such as sub- participations) which would, however, not imply a technical transfer of a claim or security right. 3.7 Debt Buyback Debt buy-back by a borrower or a sponsor is gener- ally permitted under Austrian law provided that either
a repayment is due or voluntary early prepayments are permitted on a contractual basis. In addition, con- sumer borrowers have (as a general rule) a mandatory right of early repayment. 3.8 Public Acquisition Finance Austrian law does not recognise or regulate the con- cept of “certain funds”. However, public take-over transactions (subject to the Austrian Takeover Code ( Übernahmegesetz ), which implements the European Take-Over Directive) require debt or equity funding for the acquisition of the target shares (under the hypothesis of a full acceptance of an offer) to be available and to be certified by an inde- pendent expert and for that certificate to be included in the published offer documentation. Other than that, in particular, in private transactions, “certain funds” provisions are not mandatory, but may be used by way of contractual arrangement on a case- by-case basis. In terms of documentation, there is a divide in the Austrian lending market. On the one hand, local (also major) Austrian banks frequently provide debt financ- ing to their (existing or new) customers on the basis of in-house standard documentation (in conjunction with their general terms and conditions), which may be considered “short form”. On the other, international banks targeting the Austrian market, as well as Aus- trian banks aiming at the syndication of their lending engagements, increasingly refer to “long form” docu- mentation that is frequently structured and drafted along the lines of the standard provided by the Loan Markets Association (LMA). In the context of public M&A (take-over) transactions, no public filing or other disclosure of the underlying financial documentation is required; the attestation/ confirmation on the available funding of the independ- ent expert to be included in the offer document will suffice as a matter of law.
16 CHAMBERS.COM
Powered by FlippingBook