FINLAND Law and Practice Contributed by: Timo Lehtimäki, Niklas Thibblin, Essi Hietaoja and Oona Honkamaa, Waselius
would originate loans on a cross-border basis to entities in Finland in circumstances where no licence would be required. 2.5 Club Lending and Antitrust There are no significant concerns regarding club lending by private credit providers in Finland, nor is there any specific focus on these providers by local antitrust regulators at present. 3. Structuring and Documentation 3.1 Common Structures Private credit structures are typically fairly similar to structures used in traditional, senior-secured bank lending with full cross-collateralisation across the relevant group. However, since private credit providers do not generally provide revolv - ing facilities, it is quite customary for a bank to provide a super-senior revolving facility to the borrower group. The super-senior status is most typically achieved contractually, not structurally. Delayed draw facilities are a feature offered by private credit providers, most commonly to bor - rowers planning bolt-on acquisitions. 3.2 Key Documentation Private credit transaction documents are typi - cally similar to those used by banks, which are usually based on the Loan Market Association (LMA) standards but are often at least somewhat tailored to the Nordic market. If the loan is grant - ed on a bilateral basis, the lender side will often propose their standard transaction documents. The documentation package usually includes the loan agreement, intercreditor or subordina - tion agreement, security agreements and typical conditions precedent. Unitranche structures with “first out, last out” elements and an agreement between lenders are
used; however, they have not been very preva - lent in recent years with the rise of unitranche facilities having a senior term loan with a super- senior revolving credit facility, where the prior - ity and waterfall provisions are included in the intercreditor agreement, to which the borrower is also a party. In sponsor-backed financings, the sponsor often plays a key role in drafting the relevant finance documents and holds a good negotiation posi - tion. 3.3 Restrictions on Foreign Direct Lenders Foreign lenders may require a licence to be able to provide loans in Finland, as outlined in 2.1 Licensing and Regulatory Approval . Other than that, there are no restrictions on providing pri - vate credit or taking security. 3.4 Use of Proceeds and Acquisition Financings The borrower’s use of proceeds in acquisition financing is limited, in particular by the Finnish rules on financial assistance. However, this typi - cally has very little or no relevance for the use of the acquisition facility itself by the borrower, and much more for the use of the target group Debt buybacks are generally permitted under Finnish law in private credit transactions and others. 3.6 Recent Legal and Commercial Developments There have been no significant, recent legal or commercial developments that would have required changes to the legal documentation, though the status of Finnish interest deductibility assets as collateral. 3.5 Debt Buyback
66
CHAMBERS.COM
Powered by FlippingBook