NORWAY Law and Practice Contributed by: Ida Marie Windrup, Magnus Tønseth, Markus Nilssen and Daniel Jovanovic, BAHR
3.5 Agent and Trust Concepts Norwegian law does not have the concept of “trust” as known in common law or English law, but Nor- wegian law has a well-established agency concept whereby one entity holds a security interest on behalf of itself and others. With respect to secured financings governed by Norwegian law, a security agent will be appointed by the finance parties to hold the transac- tion security on their behalf. 3.6 Loan Transfer Mechanisms Loan agreements governed by Norwegian law gener- ally contain LMA-style provisions facilitating transfers of debt, whereby the transferor agrees to transfer, and the transferee agrees to assume, the debt participation of the transferor. Syndicate lenders usually appoint a security agent to hold and administer the security on their behalf. New lenders will therefore not be required to take any additional steps to obtain the benefit of the associated security. Also, under Norwegian law, the default rule is that the security interest will follow the secured debt, without any further requirements to ensure the continuing effectiveness of the security. This means for example that a syndicate member may sell or otherwise transfer its holding in a syndicated loan, without having to take any further action or for- mality in order to make sure that transferred loan will retain its benefit from the security interest. 3.7 Debt Buyback Loan agreements may contain provisions which restrict debt buyback, but in the absence of regula- tion there are no general restrictions preventing debt buyback transactions. General equal treatment provi- sions may be applicable if the debt buyback relates to traded debt securities. 3.8 Public Acquisition Finance In private acquisitions, and in voluntary public offers on the Oslo Stock Exchange, it is customary to use the “certain funds” provisions, inspired by the UK Takeover Code, included in an LMA-based facilities agreement. This is in order to provide the seller with the necessary comfort in relation to funds being avail- able to settle the purchase price on closing. In public takeover situations, where a mandatory offer is made on a company listed on the Oslo Stock Exchange, the offeror will need to evidence that a bank or financial
not trigger licensing requirements in Norway pursu- ant to the practice and guidelines from the Norwegian regulator. The scope of the reverse solicitation exemp- tion would be subject to a case-by-case analysis. In addition, from 1 August 2025, the EU Securitisation Regulation applies in Norway and as a result financ- ing provided in Norway by a securitisation SPV in the context of a securitisation is not licensable. 3. Structuring and Documentation 3.1 Restrictions on Foreign Lenders Providing Loans Other than the licensing requirements mentioned in 2.1 Providing Financing to a Company , there are no particular restrictions on foreign lenders as opposed to domestic lenders. 3.2 Restrictions on Foreign Lenders Receiving Security Without prejudice to the licensing requirements for lending activities, there are no restrictions preventing foreign lenders from receiving security or guarantees. 3.3 Restrictions and Controls on Foreign Currency Exchange Under Norwegian law, there are no foreign currency exchange controls or limits, and there are no restric- tions regarding payments or repayments to or from a Norwegian borrower in a foreign currency. 3.4 Restrictions on the Borrower’s Use of Proceeds In general, there are no restrictions on a borrower’s use of proceeds from loans or debt securities under Norwegian law. See, however, 5.4 Restrictions on the Target regarding the limitations applicable to a Norwegian target company, which relate to support- ing an acquirer of a Norwegian target company when it comes to acquisition financing for the purchase of the shares in the Norwegian target company. The same limitations will apply, for example, with respect to a Norwegian target company obtaining a loan and on-lending these funds to the acquiring entity for the purpose of the acquiring entity paying down its acqui- sition debt (debt pushdown exercises).
454 CHAMBERS.COM
Powered by FlippingBook