Swedish Law: A Guide to Syndicated Lending and Enforcement
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In recent years, Swedish law has undergone significant changes regarding syndicated lending and enforcement. This article aims to explore the key points and implications of these changes for lenders and borrowers alike.
Financial Assistance Prohibition
One crucial aspect of Swedish law is the financial assistance prohibition. This provision prohibits companies from providing financial assistance to acquire its own shares or those of another company in the same group. However, there are some exceptions and uncertainties under Swedish law that require careful analysis.
Exceptions and Uncertainties
- Some exceptions may apply
- Careful analysis required to navigate complexities
Agent and Trustee Recognition
Swedish law permits lenders to appoint agents or trustees to represent them in all matters related to finance documents and security interests. These agents can enforce rights under the finance documents and apply proceeds from collateral to satisfy secured claims of lenders.
Uncertainty around Foreign Law Trusts
- Recognition of foreign law trusts uncertain under Swedish law
- Careful consideration required when dealing with international transactions
Loan Transfer
In Sweden, a transfer of a loan is perfected by way of notification to the debtor. A guarantee will continue to apply even after a loan is transferred, provided that the new lender has validly acquired the loan.
Key Takeaways
- Notification to the debtor perfects a loan transfer in Sweden
- Guarantees remain enforceable after a loan transfer
Tax Implications
Swedish law does not impose any withholding tax on interest payable on loans made to domestic or foreign lenders, nor on proceeds from enforcing security interests. However, foreign lenders without a permanent establishment in Sweden will not be subject to Swedish taxes.
Key Points
- No withholding tax on interest payments or security interest proceeds
- Foreign lenders without a PE in Sweden are not subject to Swedish taxes
Judicial Enforcement
Sweden recognizes foreign law contracts and may enforce them if it has jurisdiction. A final judgment rendered by a foreign court can be recognized and enforced in Sweden, but this may require a retrial on the merits.
Key Takeaways
- Sweden recognizes foreign law contracts
- Foreign judgments may be recognized and enforced with possible retrial
Conclusion
Understanding Swedish law is crucial for lenders and borrowers engaging in syndicated lending and enforcement transactions. While there are some uncertainties and complexities to navigate, careful analysis and attention to detail will help ensure successful transactions.