Banks increasingly often want to record financing arrangements in LMA based transactions. The LMA (Loan Market Association) has its registered office in London, and its objective is to drastically standardise finance arrangements. As far as banks are concerned, the main advantage is that it makes it simpler to syndicate bank finance to international parties.
LMA procedure under English or Dutch law
There are two types of LMA procedures: one under English law and one under Dutch law. The English version results in interminably long contracts because every single thing has to be recorded in minute detail. In view of the fact that a great many legal principles are provided for in the Dutch Civil Code, this LMA standard could be adapted to a lighter Dutch version. But even then, the contracts are still pretty extensive by Dutch standards. ‘LMA light’ works very well in practice, and a large number of finance arrangements have already been structured in this manner.
If you opt for ‘LMA light’, our specialists at Ploum can advise and assist you during the entire procedure. If the procedure is under English law, we are obliged to collaborate with a legal firm in the UK. Ploum has always maintained friendly contacts with our colleagues at various offices in the UK, including London. And as an independent party, we can approach various legal firms and subsequently select the best one. We have frequently been engaged in cases of international funding from the time our office was founded, so we know exactly what banks expect.
Would you like to find out more?
If you have any questions about LMA documents, please do not hesitate to contact one of the members of our Banking Law and Finance Team.