PORTUGAL Law and Practice Contributed by: Benedita Aires and Orlando Vogler Guiné, VdA
under existing or reasonably expected legal rela - tionships and are in a determinable (known or estimated) amount. To be eligible for securitisation, the receivables must meet the following requirements: • they must not be subject to legal or contrac - tual assignment restrictions; • they must convey stable, quantifiable or pre - dictable monetary flows, based on statistical models; • their existence and enforceability must be warranted by the assignor; and • they are not litigious and are not pledged as security or judicially attached or seized. As mentioned above, the assignment must be without recourse (or guarantee) to the originator or any group entity, and must not be subject to any conditions or terms. Securitisation transactions have been conduct - ed under the Securitisation Law for around 20 years; before the entry into force of this Law, they were conducted under the general Civil Code provisions, with no specific tax frame - work. It is not generally preferable to execute such transactions outside the legal securitisa - tion framework (and respective tax regime, as discussed in 7. Tax Laws and Issues ), so this analysis will focus only on securitisations carried out under the Securitisation Law, which corre - sponds to the established market practice. As in other jurisdictions, a secured loan granted by a bank (or other entity) represents a liability of the relevant borrower. Accordingly, there is no detachment from the borrower’s credit risk, with - out prejudice to any applicable credit enhance - ment achieved by any applicable guarantee or security attaching to the loan.
In a securitisation, there is a true sale of receiv - ables from the originator and a detachment of such receivables from the originator’s balance sheet. Accordingly, the assignee fully bears the credit risk of the underlying borrowers of such assigned receivables and, as such, there is no recourse to the originator/assignor. The Securiti - sation Law awards specific protections to safe - guard that detachment, including in the insol - vency of the assignor/originator. The true sale analysis is a typical component of legal opinions issued in the context of securiti - sations. 6.4 Construction of Bankruptcy-Remote Transactions A securitisation is the more typical way to detach a receivables assignment from the insolvency of the originator/transferor. If the assignment is done under general law, there may be exposure to general insolvency hardening periods and claw-back rights. This can include the retroac - tive termination of transactions that were not entered into on arm’s length terms or that were entered into in the year preceding the insolven - cy proceedings, or of security provided by the insolvent entity when it entered into the transac - tion if this took place in the 60 days prior to the commencement of the insolvency proceedings. 6.5 Bankruptcy-Remote SPE As mentioned under 6.2 SPEs , STCs are limited liability commercial companies, set up under Portuguese company law and legally framed under limited-recourse principles set out in the Securitisation Law. Nonetheless, limited- recourse and non-petition provisions are typi - cally included in the documentation. A typical limited-recourse provision establish - es that the SPE’s obligations are limited to the
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