the authoritative voice of the EMEA market

Real Estate Finance

Confidence is returning to both lenders and borrowers in Europe's real estate markets, despite the ever-increasing regulatory burden market participants are having to accommodate.
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What's New?

REF Insight

LTI Rules and Rates to DriveScandinavian House Prices (July 2018)
Fitch Ratings Report

Italian House Prices Remain at Trough (June 2018)
Fitch Ratings Report

China Offshore Real Estate Loans Reign As Onshore Bonds Slide (August 2018)
Dealogic Insight

REF Quarterly Bulletin October 2018

Upcoming events including the LMA/APL Seminar and REF Certificate Course 2019; A mezzanine mark-up of a senior facility agreement and recent legal & regulatory news, briefings and submissions to regulators.

Spanish Stamp Duty on mortgages: is the drama over?

This briefing by Allen & Overy considers Spanish stamp duty on mortgages following two recent developments: i) the Spanish Supreme Court has reversed its earlier decision and maintained the historical position that borrowers are liable for payment of stamp duty, and ii) the Spanish Government has approved a legislative change to amend the stamp duty legislation to make lenders liable for stamp duty.

UK High Court: Promise not to enforce covenant is good consideration for a loan

In the case of McDonagh v Bank of Scotland Plc & Others, the High Court considered whether a loan agreement which had been entered into was unenforceable for lack of consideration.

The Court held that the lender's binding commitment not to treat the borrower as being in default of the loan-to-value covenant in the first loan agreement constituted valuable consideration for the second loan agreement.

UK High Court holds secured lender not under a duty of rationality in enforcing full repayment of a loan Land Registry updates guidance on execution of deeds by LLPs

In UBS AG v Rose Capital Ventures Ltd, the High Court considered whether a duty of rationality, where a party must exercise contractual discretion in good faith and not arbitrarily or capriciously, should be implied into a mortgage where the lender had an absolute discretion to demand full repayment of a loan.

Update to REF documents

We have produced a mezzanine mark-up of a senior facility agreement, for use on REF investment transactions which anticipate both a senior and mezzanine loan being advanced.

In addition, we have also published a separate, additional, senior REF investment facility agreement template (with an accompanying PDF to show how it differs from the original LMA REF investment facility agreement). The mezzanine mark-up contained in the guide is then a mark-up of the clean senior facility agreement.

It is hoped that the production of these documents will make the suite of REF documents for a senior/mezzanine transaction more user friendly.

Finally, we have amended the REF financial covenants cure rider to take account of the fact that mezzanine lenders may be given the right to cure senior financial covenant breaches by way of a mezzanine loan.