NORWAY Law and Practice Contributed by: Ida Marie Windrup, Kristine Hjertenæs, Markus Nilssen and Daniel Jovanovic, BAHR
3. Structures 3.1 Senior Loans
In bilateral and/or direct lending transactions, the documentation is generally of a more bespoke nature and may be highly tailored to the relevant direct lender, or even the sponsor for sponsors that are active in the acquisition finance market and often supported by the same credit fund. In the Nordic bond market, Nordic Trustee is the leading provider of bond services and admin- istrator of standardised templates and docu- ments. Over the years, the bond documenta- tion has become more and more standardised, adjusted only to reflect necessary deviations, particular structures, and preferences of the respective arranger to the extent acceptable to Most transaction documents are written in Eng- lish. There is no legal requirement in Norway to translate documents from English to Norwegian (or vice versa) for the purpose of acquisition financing. However, certain official forms for security, such as asset-specific floating charges, are only available for submission to the relevant registry in Norwegian. Also, certain constitution- al documents filed with the company registry, such as the articles of association, and hence also corporate authorisations changing those, must be in Norwegian. 2.4 Opinions Legal opinions issued under Norwegian law will be in a format generally seen in the international finance market. Market practice is for lenders’ counsel to render an opinion covering both obli- gor capacity as well as legality/enforceability – it is less common for borrowers’ counsel to issue a separate capacity opinion. Limitation on liability is commonly seen in opinions in the Norwegian market. Nordic Trustee. 2.3 Language
Senior loans granted by banks or a combination of banks and investors, continue to be the main source of acquisition financing in the Norwegian market. Bank lending will generally be on a syn- dicated or club basis, and heavily influenced or based on the LMA leveraged template (adapted for Norwegian law as mentioned above). Senior loans will typically be structured with one or more tranches utilised for different purposes with varying features. For the purpose of acqui- sition financing, there will typically be a desig- nated term loan tranche, which may be coupled with a term or revolving facility for the purpose of refinancing or general corporate purposes or working capital facilities. Senior loans may also include separate ancillary or increase facilities, to accommodate for potential future needs to upsize, etc. The tranches may have different features, such as differing interest rates and repayment sched- ules, and the loans may be amortising or non- amortising. Overall, the structure depends on the transactions, the size, the type of lender, etc. Acquisition financing will typically be secured and rank in priority to other debts, either con- tractually through an intercreditor agreement or structurally by way of junior debt held at differ- ent levels. As mentioned above, direct lending structures are starting to make their way into the Norwegian market as well. Direct lending providers are typi- cally able to offer different (longer maturity, fixed interest) and occasionally more flexible terms than banks and increasingly able to take larger credits, for instance by forming a club of lenders on the largest transactions.
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