DENMARK Law and Practice Contributed by: Morten Krogsgaard and Lennart Meyer Østenfjeld, Moalem Weitemeyer
precedent documentation, which is rarely gov- erned by Danish law. 2.2 Use of Loan Market Association (LMA) Agreements or Other Standard Loans Loan Market Association (LMA) agreements are commonly utilised for acquisition financing, particularly in cross-border transactions or club deals involving non-Danish lenders. Most treasury functions in large corporates and private equity funds are familiar with the LMA suite of documents. There is no LMA standard documentation under Danish law. However, in bilateral transactions involving domestic lenders, reference is often made to “Nordic Light” version of the LMA. While the content of the “Nordic Light” version tends to differ from transaction to transaction, the general structure of the LMA is followed, but with boilerplate provisions regulating the multi- lender structure being deleted. Representations, undertakings and events of default may follow the same structure and scope as the LMA or may be drafted in a manner reflecting the rela- tionship banking basis of these bilateral agree- ments. Updates to the LMA are monitored in the Danish market to mitigate risk and align with interna- tional best practices while accommodating Dan- ish regulatory and market-specific requirements. Active banks have a preferred template cor- responding to “Nordic Light” version, whereas Danish regional banks active in the SME segment tend to use standard (short-form, not acquisition finance-specific) documentation. The choice of documentation may also be affected by prec- edent documentation or sponsor preference,
particularly non-Danish sponsors who are not familiar with Danish short-form documentation, which is largely based on Danish law principles like fallback and may not be familiar with the “Nordic Light” version of the LMA. 2.3 Language There are no statutory requirements mandating that financial documentation, including facility agreements, must be in Danish. Parties generally have the freedom to agree on the language of their agreements and English is widely accepted. This is particularly true for corporate and institu- tional transactions, private equity-backed trans- actions and cross-border transactions, where LMA standard documentation is often used. Smaller regional banks prefer their own stand- ardised documentation which is often in Danish. However, certain practical and regulatory con- siderations apply, especially regarding the reg- istration of security interests in the Danish Land Register ( Tingbogen ) and Personal Property Register ( Personbogen ). Danish is the language used in courts and for enforcement purposes finance documents may need to be translated into Danish if so ordered by the court at its dis- cretion. This requirement can sometimes lead to limitations on cross-references between docu- ments to mitigate the risk of being required to translate cross-referenced documents as well. 2.4 Opinions Legal opinions are considered standard docu- ments in acquisition finance transactions. In almost all cases, they will be a condition prec- edent to the first utilisation.
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