Hungary: will securing syndicated loans be easier in Hungary?
From 15 March 2014, Hungarian law will recognise the concept of trust, and the problems with securing syndicated loans under Hungarian law seem to be solved.
If a syndicate of banks provides funds to the debtor, usually the security trustee, being a member of the syndicate, holds in trust the security interest(s) established over the assets of the debtor on behalf of the other syndicate members. So far, the implementation of this structure has been difficult under Hungarian law.
Security interests in Hungary are generally subject to a registration requirement (with limited exceptions). However, as Hungarian law does not recognise the concept of trust, the trustee cannot hold the security interest on behalf of other syndicate members, meaning that only registered lenders become secured. This, together with the accessory nature of security interests, led to the development of various solutions from the lawyers…
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