NEW ZEALAND Law and Practice Contributed by: David Weavers, Jesse Fairley and Matt Consedine, Russell McVeagh
2. Documentation 2.1 Governing Law
latest developments and technology in the Aus- tralian market (which in turn is influenced by US and European markets). For non-New Zealand law governed financing documents, the form that the documents take depends on the market practice in the relevant jurisdiction. 2.3 Language Financing documentation is drafted in English as a general rule although this is not a legal require- ment. 2.4 Opinions Legal opinions will typically be provided by lend- ers’ counsel in respect of the following, among other things: • the capacity and authority of, and due execu- tion by, the obligor and entities party to the finance documents; and • the validity, binding nature and enforceability of the main finance documents (including any security documents). A legal opinion will be required as conditions precedent to initiate drawdown under the facili- ties agreement (in respect of the initial obli- gors and the initial finance documents), with an equivalent opinion delivered as a condition precedent to the subsequent accession to the finance documents of any additional obligors, such as the target (in respect of those additional obligors and any new finance documents, such as accession documentation and any new secu- rity documents). Each major New Zealand law firm has its own form of transaction legal opinion, which are gen- erally similar in substance across the market and
New Zealand law will govern all finance docu- ments in domestic transactions. This is the case for corporate loans, acquisition finance and lev- eraged buyouts. For international transactions, the governing law of the main finance documents (aside from security) will be driven by the market where the financing is being raised. However, it is fairly uncommon for New Zealand denominated financing to be raised outside of New Zealand. Security documents will typically be governed by the law of the jurisdiction in which the relevant assets are located. 2.2 Use of Loan Market Association (LMA) Agreements or Other Standard Loans Financing documentation is not fully standard- ised in the New Zealand market. The Asia Pacific Loan Market Association (the Asia-Pacific region equivalent of the Loan Market Association) has produced a suite of standard form documents that are applicable for use in the Australasian market, although there is no specific leveraged suite of documents. While not standard across the market, the Asia Pacific Loan Market Associ- ation forms are becoming more commonly used for investment grade transactions. For leveraged transactions, it is more common to base the facility agreement on the sponsor’s precedent. Each major New Zealand law firm has its own form of facility and security documents, which are generally similar in substance across the market. Due to the large number of Australian sponsors active in the New Zealand market, New Zealand facility documentation often adopts the
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