PORTUGAL Law and Practice Contributed by: Benedita Aires and Orlando Vogler Guiné, VdA
3.8 Bonds/Notes/Securities Terms and conditions will generally cover all matters relating to the notes as would generally be found in other jurisdictions, including: • the relevant payment priorities; • applicable events of default; • the conditions for early redemption of the notes; • the applicable taxation regime; and • general provisions for noteholders’ meetings. 3.9 Derivatives Derivatives may be contracted for SPEs to hedge risks, notably currency and interest rate risks. It is also possible to enter into credit default swaps or other derivatives with a hedging purpose, on the side of the SPE. Before the financial crisis, it was quite common to have an interest rate swap (IRS) in place for rated deals, in order to hedge the floating or fixed component of interest rates. Hedging was not used during the years when securitisations were generally retained deals. There is now a renewed and increased use of derivatives, more often in the form of interest rate cap transactions. 3.10 Offering Memoranda The material forms of disclosure include a duly approved prospectus, prepared in accordance with the EU Prospectus Regulation (and its com - plementing Regulation (EU) 2017/1129), unless the transaction does not require a prospectus (ie, no admission to trading on a regulated market, or public offering requiring such). In this case (ie, private offerings, where there is no public visibility of the transaction through the means of a prospectus that is normally available at the regulator or stock exchange’s website, free of charge), certain transactions include an informa - tion memorandum (as in the case of deals list - ed on a multilateral trading facility/unregulated
market) or a transaction summary (which may resemble a prospectus, but is not approved by a regulator), while others just rely on the con - tractual documentation, without the need for a more comprehensive key information docu - ment. In this respect, it is relevant to consider the requirements set out under Article 7(1) c) of the Securitisation Regulation.
4. Laws and Regulations Specifically Relating to Securitisation 4.1 Specific Disclosure Laws or Regulations Regulations
Disclosure matters are generally governed by EU legislation or have an EU law source. The EU prospectus requirements are of a more general nature and will be addressed in 4.2 General Dis- closure Laws or Regulations , but the following regulations should be highlighted. Certain disclosures need to be made and docu - mented; their absence prevents regulated enti - ties investing in asset-backed securities (ABS), or makes it much more burdensome for them to do so. This entails disclosure on exposure reten - tion and ongoing information requirements. Securitisation Regulation On 28 December 2017, Regulation (EU) 2017/2402 of the European Parliament and of the Council of 12 December 2017 was published, laying down a general framework for securitisa - tion and creating a specific framework for sim - ple, transparent and standardised securitisation (STS Securitisation), and amending Directives 2009/65/EC, 2009/138/EC and 2011/61/EU and Regulations (EC) No 1060/2009 and (EU) No 648/2012 (the Securitisation Regulation).
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