SWEDEN Law and Practice Contributed by: Niklas Sinander, Elin Carlsson, Axel Schelén and Björn Wendleby, Harvest Advokatbyrå
3.6 Loan Transfer Mechanisms Lenders may generally transfer loans, together with the existing security package, to a third party. Strong borrowers – most commonly investment-grade companies or borrowers backed by private equity sponsors – may successfully negotiate to limit loan transfers to a certain group of pre-approved lenders or financial market participants regularly engaged in lending business on the Swedish market. The relevant security package should be transferred in connection with the loan transfer, as Swedish law requires that there be an existing or future debt in order for the security interest in relation thereto to be valid. Due perfection of the security package should be taken into consideration in connection with a transfer of the loan and the security package to a new lender. 3.7 Debt Buyback Swedish law does not restrict debt buybacks, but Swedish law-governed facility agreements gener- ally contain standard LMA-based restrictions in this regard. Debt buybacks are uncommon in the Swed- ish loan market, as most transactions are syndicated loans with a limited secondary market activity. 3.8 Public Acquisition Finance Before an offeror makes a tender offer (public take- over bid) in respect of a Swedish company whose shares are listed on a Swedish stock exchange, the offeror must have secured funding to complete its tender offer. A tender offer should (among others) include a description of the financing arrangement, meaning that the offeror needs to describe any third- party financing (including conditions for such financ- ing arrangement). In addition, to ensure transparency and fairness for the target shareholders, the offeror is obliged to comply with rules on strict time limits and notification periods. Certain fund provisions are not only used in the con- text of public acquisition finance – the use of these provisions is also quite common in relation to private equity transactions.
ness from being operated. The same applies to foreign lenders that fall within the scope of sanctions. 3.2 Restrictions on Foreign Lenders Receiving Security Foreign lenders are not restricted or impeded from receiving security or guarantees. 3.3 Restrictions and Controls on Foreign Currency Exchange Foreign currency exchange controls are not imposed in Sweden and there are generally no restrictions on commercial transactions in this regard. It should be noted that certain financial institutions are subject to reporting requirements for specific cross- border payments. Such reports must be submitted to the Riksbank. 3.4 Restrictions on the Borrower’s Use of Proceeds There are no general restrictions under Swedish law on the borrower’s use of proceeds from loans or debt securities. However, specific restrictions apply in certain cases, such as financial assistance (please see 5.3 Downstream, Upstream and Cross-Stream Guarantees and 5.4 Restrictions on the Target ) and transactions not permitted under AML and sanction regulations. It should also be noted that the use of proceeds is typically regulated in the loan agreement between the lender and the borrower (which often contains restric- tions on the use of proceeds similar to those of the The concept of agents is recognised in Sweden and is commonly used in structured financing transactions, both in relation to an agent appointed by the lenders to act on behalf of the loan syndicate towards the borrower as well as in the appointment of a security agent to act on behalf of the secured parties in relation to the security for the financing in question. Trusts The concept of trusts is not recognised in Sweden. Loan Market Association (LMA)). 3.5 Agent and Trust Concepts Agents
586 CHAMBERS.COM
Powered by FlippingBook