PORTUGAL Law and Practice Contributed by: Benedita Aires and Orlando Vogler Guiné, VdA
There is no legal requirement for there to be a common representative, and some private deals have avoided this, having the usual rights of a common representative directly vested in the noteholders. 2.8 Security Trustees/Agents Portuguese law does not recognise the concept of a common law trustee, and typical securitisa - tion structures in Portugal do not have a security agent. In any case, the Securitisation Law pro - vides for the direct creation of security over the transaction assets to the benefit of the investors. 3. Documentation 3.1 Bankruptcy-Remote Transfer of Financial Assets The receivables are assigned (sold) under a cer - tain type of specific Receivables Sale Agreement (or a transfer document with a similar name and purpose). This agreement essentially mirrors the terms and structure found in other jurisdictions, including the identification of the assets and a package of representations and warranties on the relevant receivables portfolio and their origi - nation, given as of the relevant collateral deter - mination date (and sometimes repeated on the closing date). 3.2 Principal Warranties The warranties package is much in line with other jurisdictions, considering that the relevant concerns are essentially the same. In light of the Securitisation Law, the originator will represent and warrant that: • the legal requirements applicable to securi - tised receivables are met; • the receivables have been duly originated and serviced;
• the relevant consumer and data protection laws (where applicable) have been respected; • there are no defaults at all or in excess of a given number of days (except for NPLs); • the relevant security is in force and perfected, etc. The typical remedy under Portuguese law for a breach of contract, including incorrect represen - tations, is the indemnification of the other party, even if the contract does not expressly provide for this. In any case, indemnities are always pro - vided for in receivables sale agreements. For a breach of representations in respect of the receivables portfolio, the originator may also have to repurchase the relevant receivables and/ or substitute them for other eligible receivables (as is more common), as an alternative to indem - nification. 3.3 Principal Perfection Provisions The assignment of the receivables takes place once the parties have entered into the receiva - bles sale agreement and all conditions prec - edent are met. A specific formality applies in cases where there is security subject to public registration (such as mortgages), as the parties’ signatures must be notarised or certified by a lawyer or the company secretary. As discussed in 6.3 Transfer of Financial Assets , except in the NPL market, the perfection of security vis-à-vis third parties is usually not conducted immediately by the issuer (in order to avoid costs in a context where the origina - tor retains the servicing), even though it holds the right to do so. Thus far, there have been no performing securitisations where the issuer has actually followed these steps.
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