PORTUGAL Law and Practice Contributed by: Marta Pontes, Hélder Frias and José António Reymão Nogueira, Uría Menéndez
Uría Menéndez Edifício Rodrigo Uría Praça Marquês de Pombal, 12 1250-162 Lisbon Portugal Tel: +351 21 030 86 00 Fax: +351 21 030 86 01 Email: helder.frias@uria.com Web: www.uria.com
1. Market 1.1 Major Lender-Side Players
This is an important development under Portu- guese law, given that the activity carried out by the loan funds constitutes an exception to the principle of exclusivity ( princípio da exclusivi - dade ), according to which only credit institutions and financial companies may grant credit on a professional basis. Furthermore, one important feature of the legal regime applying to loan funds is that the lending activity is subject to the same rules as banking lending activity in several key respects, such as interest capitalisation, interest rates and late payments. Nevertheless, the legal regime applying to these loan funds is still pending clarification on the tax- ation regime applicable to their activity, which may be discouraging some players in the market from incorporating and using these debt funds. In any case, this clarification is expected to be issued in the near future. 1.2 Corporates and LBOs The financing of acquisitions involves many methods and structures, but the most common are banking loans, either through syndicated loans or a traditional loan secured by the shares of the special purpose vehicle (SPV) and/or the future shares to be acquired in the target.
The key players on the lenders′ side remain local or international banks granting funds to the buy- ers. However, there has been an increase in the number of debt funds taking the role of financi- ers of companies in Portugal. Decree-Law No 144/2019, of 23 September 2019, created the legal regime establishing loan funds in Portugal, which main purpose is to grant and acquire loans to corporates on a profession- al basis. This legal regime was then replaced by Decree-Law No 27/2023, of 23 April 2023 (the “Asset Management Legal Regime” ), which fur- ther expanded the rules applicable to loan funds operating in Portugal. These loan funds are regu- lated vehicles required to be registered with the competent supervisory authority (Comissão do Mercado de Valores Mobiliários) (CMVM). The establishment of loan funds aimed to pro- mote the development of capital markets in Portugal and diversify the funding sources of companies, which is of great importance to small- and medium-sized enterprises seeking alternatives to bank financing.
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