Introductory guide to loan transfers


Published by a UUÂãÁÄÖ±²¥ Banking & Finance expert
Practice notes

Introductory guide to loan transfers


Published by a UUÂãÁÄÖ±²¥ Banking & Finance expert

Practice notes
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This Practice Note explains:

  1. •

    what is meant by a loan transfer

  2. •

    the key issues to consider in relation to a loan transfer

  3. •

    the main methods of transferring a loan under English law

  4. •

    transfer provisions in loan agreements

  5. •

    the borrower consent requirement

  6. •

    process and documentation required for transfer, and

  7. •

    overseas law issues

What is meant by a loan transfer?

A loan transfer refers to the transfer by a lender of its rights, and often also of its obligations, under a loan agreement.

Rights will typically include the right to be repaid the loan principal and interest as set out in the facilities agreement. The lender will have other contractual rights, such as the right to demand repayment early if there is an event of default and to recoup costs and expenses.

The key obligation that may also need to be transferred, is the commitment to make further loans under the facilities agreement—this may not be relevant if the loan being transferred is fully drawn.

Loan transfers are common

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United Kingdom
Key definition:
Underwriting definition
What does Underwriting mean?

In the context of a share issue, carrying out a firm commitment to take up a specified quantity of securities on a given date and at a given price if no other third party acquires or subscribes for them.

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