LMA launches new REF security documents01 July 2020
The LMA is pleased to announce the launch of two new security agreements intended for use on real estate finance transactions (the "New REF Security Documents"), as well as consequential changes to the LMA REF facility agreements.
One of the New REF Security Documents, the LMA REF development security agreement, has been designed for use with the LMA REF Development Facility Agreement. The other New REF Security Document, the LMA REF shareholder security agreement, has been designed for use with both the LMA REF Investment Facility Agreement and the LMA REF Development Facility Agreement. It also provides optional drafting in the event that the shareholder is also a subordinated creditor.
This initiative was begun in response to demand from participants in the syndicated loan market, who felt that this project would be beneficial for the market. The project also signals the LMA's continued commitment to achieving efficiencies across the market through the use of a common, recognisable framework, enabling market participants to concentrate on the key commercial drivers which form the basis of their transactions.
The project was worked on and agreed by an experienced working party, consisting of representatives from banks (including in-house lawyers) and major City law firms, and was based on their first-hand knowledge and experience of syndicated loan market transactions in the REF sector.
Commenting on the New REF Security Documents, Clare Dawson, Chief Executive of the LMA, said:
"Real estate finance forms a significant part of the syndicated loan market and is a key contributor to economic growth. The LMA remains committed both to fostering REF liquidity and assisting its members who are active in this market. We hope that the addition of two new English law REF security agreements to our existing suite of REF documents will lead to more efficient and productive negotiation of documentation."