Cleary Gottlieb on Latest Developments in European Leveraged Finance
EVOLUTION OF THE TRANSFERABILITY CLAUSE
Early 2000s
- Lenders’ freedom to transfer their participations in large leveraged loans has been gradually eroded by developments introduced through the last few credit cycles.
- By the time of the pre-crisis peak in 2007/2008, the provisions governing freedom to transfer had settled on the following:
- Transfers had to be to “another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets”.
- Borrower consent to any transfer was required (which