SPAIN Law and Practice Contributed by: Miguel Cases, Toni Barios, Joaquín Fabré and David Navarro, Cases & Lacambra
In case there is a facility/security agent in the financing transaction, the relevant formalities for the authorisa- tion of such agent should also be carried out by the new lender (ie, granting of powers of attorney in favour of the agent). In case the contractual position assigned is one of the facility/security agent, it will be necessary that all lend- ers to the transaction grant new powers of attorney to the new agent. 3.7 Debt Buyback Debt buyback by the borrower or the sponsor is legal- ly permitted, as long as the loan documentation does not prohibit it. It should be taken into account that in accordance with the Spanish Civil Code, in case of debt buyback by the borrower, the obligations derived from the transaction would be extinguished upon the debtor and the creditor becoming the same person. 3.8 Public Acquisition Finance The acquisition of shares of a listed Spanish company is usually made through a takeover bid, which is regu- lated in Spanish Royal Decree 1066/2007, dated 27 July, on the regime of takeover bids. Takeover bids shall be announced, and the offeror shall file a takeover prospectus with the CNMV ( Comisión Nacional del Mercado de Valores ) for its authorisation. The prospectus shall include certain information, in accordance with Spanish Royal Decree 1066/2007, including details of the creation of sufficient guaran- tees that ensure fulfilment of the obligations result- ing from the takeover bid. Once the authorisation is granted by the CNMV, the offer shall be publicly filed. When the consideration for the bid consists, in whole or in part, of cash, the offeror shall comply with the foregoing condition via the provision of a guaran- tee issued by a credit institution or documentation accrediting the creation of a cash deposit in a credit institution which guarantees the payment of the con- sideration in cash. For the purposes of providing such guarantee, if the credit institution issuing the guarantee is not located in
the European Union, the CNMV may require additional information and requirements to certify the sufficiency of the guarantee. Also, commonly, the CNMV will not accept guarantees issued by a company in the same group as the offeror. When the consideration offered consists of securities already issued, the availability of such securities and their allocation to the result of the bid mush be justi- fied. In any case and irrespective of the legislation regard- ing takeover bids, listed companies are obliged to deliver information to the CNMV with respect to a number of matters, including any information that may affect the price of their shares. Some takeover bids require the authorisation of the Spanish government in accordance with Article 7 bis of Spanish Law 19/2003, dated 4 July, on legal regime of movements of capital and economic transactions abroad and on certain measures for prevention of money laundering (see 3.2 Restrictions on Foreign Lenders Receiving Security with regards to this authorisation). 3.9 Recent Legal and Commercial Developments The following recent changes need to be taken into account when drafting loan documentation. • Brexit – the United Kingdom is no longer a mem- ber state of the European Union and therefore no longer benefits from its regulations, especially with regards to the freedom of movement inside the European Union. • Russian invasion of Ukraine – the European Union has enacted several pieces of legislation on sanc- tions on transactions with Russia. It would be advisable to review the usual relevant provisions regarding sanctions to ensure that these regula- tions are properly covered in the loan documents. • Benchmarks – in light of EU benchmarks regulation and the LIBOR transition process, it is necessary to include rate-switch provisions, replacement of screen rate clauses, and to assess the need to enter into reference rate selection agreements in relation to legacy transactions.
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