Amending secured facilities — do I need new security?
By Adam Pierce and Charlotte Drake
It is a question that lenders and their lawyers have to consider every time the terms of a secured transaction change. Will the existing security remain effective following the amendment? Demanding new security routinely, without proper analysis, is rarely a viable approach. Taking new security need not be complicated, but it will cost money, usually the borrower’s money. It will involve new documents, satisfaction of any registration and other perfection requirements, and sometimes new legal opinions.
Even if a lender takes all these steps, new security may not put it in as strong a position as the original security. For example, a new floating charge may be subject to new hardening periods. On the other hand, if a lender assumes it can rely on its existing security without proper thought, it may find itself unsecured.
So, before agreeing amendments, a lender needs to understand whether there is a genuine risk that its existing security will no longer work. Here we explain the key points to consider…
Click on the link below to read the rest of the Dentons briefing.
News from Dentons
News from The Lawyer
Briefings from Dentons
The Ontario government says that it is acting on the early results of the Mining Sector Health, Safety and Prevention Review.
‘Inversion’ transactions are nothing new, and the current proceedings appear to be just another replay of earlier games of tag between the government and US multinationals.
Analysis from The Lawyer
The continent’s boom in natural resources and renewable energy is sparking an infrastructure drive
Shearman & Sterling is making its presence felt in the City, squaring up to magic circle firms and looking to muscle in on key relationships. Private equity house Bridgepoint is one outfit that has had its head turned by the US firm.