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aspx? f=/srodeken.htm), in the last 12 month the conditions for providing secure business lending have slightly become stricter and interest-free lending prices have risen. A number of creditors have toughened the collateral requirement, reducing the limit and shortening the repayment time.
Due to the significant deceleration of investments in Poland (including partly EU-funded projects), the fast pace of change of the regulatory environment and the higher risks of lending to certain markets (e.g. mines, renewables, fuels and industrial property ), the number of guaranteed long-term credits provided to companies and government institutions has generally declined over the last 12 month.
Exceptions are small and medium-sized enterprise credits, where steady economic expansion persists. According to the domestic system, there are two kinds of collateralised loans: loan and guaranteed loan-type. Granting a loan (including a guaranteed loan) is not a regulatory business. Creditors granting credits (e.g. specialized banks and insurers) must, however, abide by the rules of private life on credits and collateral.
As regards retail exposures and mortgages, the applicable retail legislation and mortgages rules must also be respected. Certain common forms of collateral (e.g. commitments ) are only available to supervised undertakings, in particular banking and finance institutes. Is there a particular set of regulatorial questions that a potential lender should consider when agreeing or concluding a collateralised loan agreement?
Borrower should always consider whether their property or right may be collateral. Establishing a right of collateral for certain kinds of property (e.g. a fund held in several kinds of accounts ) is forbidden under Danish legislation. Is there a particular set of regulatorial questions that a potential creditor should consider when agreeing or concluding a collateralised credit arrangement?
Creditors wishing to provide credit governed by private civil legislation must be familiar with the applicable rules of the Polish Civic Code and other legislation, as well as with the far-reaching rules for doing business there. There are also a number of different schemes for granting credit to consumers. There are, for example, specific limitations on the way credits are market, granted and disposed of, on how to handle borrower defaulting on payment.
Further provisions to be taken into consideration are the provisions on the identification of interests. Specifically, creditors should observe the following laws: the Land Register and Mortgage Act, which provides the regulatory setting for the creation of mortgage loans; the Registered Lien Act and the Pledge Register, which regulate the recordable, immovable or mobile kinds of collateral that can be created on various mobile properties and interests; the Civil Code, which governs other kinds of collateral that are not governed by a specific jurisdiction (e.g. assignments of interests, assignments of ownership, common liens and guarantees).
Lending from companies whose activities do not involve finance is taxed on commercial legal operations. After 1 January 2000, for a duration of more than 60 month, consumer credit was provided. This bill forbids the grant of such credits and lays down regulations governing the payment of overpayments of credits that have been fully or partially reimbursed.
As regards safety, restrictions should be laid down on the amount of mortgages on farmland. Which are the current suppliers of secure financing in your jurisdictions (e.g. global banking, domestic banking or non-banking)? For the most part, Poland's legally collateralised credit operations are regulated by means of documentations largely drawn on the suggested form issued by the Loan Market Association (LMA).
Also in November 2016, the Association of Polish Banking Institutions issued a recommendation for a Polish-language edition of an LMA-based credit agreement contract template for legally regulated credit lines. Where they are not assisted by an outside lawyer, local bankers often use their own standardised types of document, particularly for low-value operations. Does your country have specific laws for collateralized credit lines?
Yes, consortium loan contracts are very widespread, especially for large investment projects (e.g. as part of financing projects or major property financings). As a rule, all creditors within revolving credit facilities act as party to the credit contract, with one also serving as agency and mandate lead arranger. However, the other party is the lender. Among other things, the intermediary's function is to co-ordinate credit utilization (including checking the fulfillment of suspensive conditions), payment, collateral management, communications and day-to-day management of the credit line.
In your jurisdictions, does the Act allow collateral and warranties to be fiduciarily retained by a collateral fiduciary for the account of the bank consortium? In most cases, however, in the context of consortium loans, the management agents also act as collateral agents in the name and on behalf of all collateral takers.
It shall in such cases hold the collateral on account of all creditors, perform the necessary governmental and administrative tasks to preserve the applicable interest and exercise judicial review of the collateral in the case of late payment. Furthermore, there is a difference in Poland legislation between the terms deposit manager and hypothecary.
Guaranties are issued in favor of the relevant lender. For some collateralised credit operations, the principle of concurrent indebtedness is established where the collateral taker has a distinct right against the collateral taker and this right is safeguarded and ensured. As a rule, would collateral be provided for the SPV units or would creditors demand immediate collateral?
If an SPV is used, the creditor receives collateral for the SPV's interests and property. The most frequently used benchmark interest is EURIBOR and WIBOR (Warsaw Interbank Offered Ratio ), dependent on the credit line denominated in the respective city. Credit facilities typically contain rules that set other benchmark levels in the event that a normal floating benchmark interest is not reviewed.
Is there a regulator's limit on the interest rates that can be applied to credit from banks? Interest rates that may be levied on credit extended by banks are restricted by compulsory rules of domestic legislation. According to whether a credit line is provided by a banking institution or a non-banking institution, the Civil Code and the Act on Payment Conditions for Transactions in Commercial Relations establish a limit for contract and late payment interest.
Thresholds for both interest categories are tied to the latest benchmark interest ratepublished by the National Polish Central bank and are above normal interest rents. Do warranties apply in your jurisdictions? Yes, warranties are used in Poland. It is possible to distinguish between warranties from bankers, guarantee insurances and warranties from companies that are neither bankers nor underwriters.
For the latter last class, two kinds of guaranties are recognised: Warranty - by means of a guaranty bond, the guaranty obliges the lender to fulfil an undertaking if the borrower fails to fulfil it. Warranty - Warranties are not governed by the Civil Code, but the law governing a warranty is generally accepted by domestic law on the basis of contractual exemption.
However, as already stated, warranties are not governed by the Civil Code and therefore there are no legal demands on the type of warranty. Does legislation influence or limit the provision or enforcement of warranties in your jurisdictions (e.g., up-stream warranties)? Several of the most important statutes that may influence the issuance or enforcement of warranties are:
Bankruptcy and reorganization law - under national bankruptcy and reorganization law, a guaranty may be jeopardized if it has been provided by a business for a certain amount of time before the start of bankruptcy or reorganization procedures. Rules on the provision of economic support - a public limited liability undertaking may provide direct or indirect funding for the purchase or issue of securities, in particular by means of a loan, prepayment or the provision of securities, provided that such funding is provided on arm's length terms and that the borrower's ability to pay has been verified, such purchase or issue is made at an appropriate rate, such funding is provided from the reserves established by the undertaking for this end, and such funding is provided on and within the bounds laid down in a previous decision of the general meeting of the undertaking.
Outline the most commonly used ways to structure the priorities of your liabilities and collateral. Most commonly used ways of giving preference to liabilities and collateral are the contractually subordinated nature of liabilities and the provision of collateral securities of different rank over the debtor's property. Should the Mortgagor become insolvent, the owners of the Collateral Rights will be paid from the Collateral Asset before all other Bondholders (according to their priority).
Concerning the prioritisation of interests, the order of precedence is established chronologically but, in general, the precedence of interests in real estate may also be changed by contract. Typically, it is also common for different categories of lenders to subscribe to an intermediate loan contract, and for the borrowers to govern the debt priorities, the collateral and the way the collateral is enforced.
Is there any payment of duties, tax, stamp duties or other charges in connection with the provision or enforceability of a loan, surety or interest? Loan contracts (and changes to such contracts if they lead to an equity increase) may be liable to a 2% rate of taxation on TCLT if: the loan contract benefits are administered abroad but the borrowers are resident or domiciled in Poland and the loan contract was concluded in Poland.
Income taxes arise on the fulfillment of a loan contract. In general, the taxable amount is the amount or value of the loan (capital). When the capital is payable in instalments and the aggregate amount of a particular instalment is not known ( e.g. in the case of an arrangement that does not specify the aggregate amount of the capital), the levy on a particular instalment is payable upon payment.
Borrowers are required to charge and settle the taxes within 14 workingdays of the date of execution of the loan or receipt of the instalment of the loan. Lending from banks and companies whose activities consist in the provision of finance (and which are deemed to be persons paying VAT) is generally not covered by the TCLT (as they are liable to value added taxes - they enjoy value added taxes exemption).
In addition, the TCLT excludes from its scope any loan made by a stockholder to the corporation in which he owns the securities (a private or public limited company). There is no TCLT underlying any warranty or securities. Judicial charges Judicial charges are incurred when registering liens and mortgage payments in the appropriate register.
If changes to the liens or mortgage registrations are made, extra legal costs must be paid. Tax on stamps is to be paid if the request for registration of a share is actually made by a lawyer. Charges incurred if a lien is exercised in the legal sense in the legal sense of a notarised document (e.g. mortgage) or with notarised signature (e.g. lien on a share in a private limited company) or with the notarised date (e.g. chattel mortgaging or asset transfer).
Unless exempted, interest payable to a non-Polish corporation under a loan - as well as sureties and collateral provided - is liable to source taxation. Statutory source taxes on interest received, sureties and collateral provided to non-residents of Poland are 20%. Corporation taxpay As a general principle, earnings from the provision of warranties, transferable stock or other collateral by a non-resident corporation are not liable to corporation taxpayers in Poland (with the exception of liability to source tax).
However, where a warranty or surety is provided free of consideration, it may be considered a gratuitous service which generates corporation taxable revenues for the enterprise to which the service was provided. Value added taxes (VAT) are normally levied on operations involving the provision of warranties, transferable securities and/or other forms of collateral, but they are exempt if they take the legal form of supplies of goods orervices.
If so, supplies of goods or provision of assurances, warranties and other assurances in respect of finance and assurance operations and supplies of goods or provision of assurance in respect of such supplies by the agency shall be exempted from value added tax. Also the administration of loan guaranties by a borrower or loan provider profits from the value added tax waiver. Is there any restriction on lending by or the provision of collateral or guarantee to non-resident creditors?
There is no distinction in Poland legislation between domestic and international creditors with regard to the granting of credit or the provision of collateral, unless a particular jurisdiction is subject to special commercial penalties. Certain classes of collateral, namely commitments, are only available to a particular group of creditors listed in the Act on Certain Collateral Arrangements.
Therefore, when considering the creation of a charge governed by this Act, non-resident creditors should always consider whether it can be established in their favor. Is there any control on currency that restricts payment to a non-resident creditor under a securities instrument, bond or loan contract? It is possible to establish a lien over all of a company's financial instruments?
Assuming so, would a lump-sum collateral arrangement be sufficient or is a lump-sum collateral arrangement necessary for each kind of financial instrument? According to Poland it is possible to provide securities for all moveable property and privileges of a domestic corporation. Collateral can be provided for the entire property of a business by establishing a recorded lien.
An encumbrance on immovable property, however, cannot be charged by a recorded lien and a special collateral (i.e. a mortgage) must be created for it. How do you formalise the release of collateral for the most popular types of investment? As a rule, collateral rights of an accessory character (e.g. pledged items and mortgages) lapse when the collateralised liability matures.
Concerning other kinds of interests, the terms of forfeiture are governed by the contract under which the interest was created. After repayment of the collateralised commitment, it is customary for creditors to write a clearance note to demonstrate that the commitment and the related collateral have expired.
However, if the guaranteed commitment does not mature but the corresponding securities are to be cleared, a disclaimer from the creditor is necessary to clear the securit. Is it possible to provide collateral for property? And if so, what are the most commonly used securities for property and what is the process?
Yes, securities can be provided for properties. Hypothecary loans are the most frequent type of protection for this investment category. The creation of a lien on immovable property generally involves the performance of a contract of mortgages or a declaration of mortgages in the legal instrument of a notary (subject to certain legal exceptions) and entry in the cadastre.
And if so, what are the most commonly used types of collateral for this type of ownership and what is the process?
Yes, safety can be guaranteed for machines and plants. Securities pledged and transferred by way of collateral are the most commonly used types of collateral in this investment category. In order to establish a pawn, a pawn contract must be concluded and, in the case of a pawn entered, the pawn must be entered in the pawn record.
No legal requirement exists for a collateral assignment arrangement. In order, however, to be valid against the insolvency assets of a guarantor, this should, however, be carried out in writing with the date authenticated by a solicitor. Is it possible to provide collateral for claims? And if so, what are the most commonly used types of collateral for this type of asset and what is the process?
Yes, collateral may be provided for claims. Securities pledged and transferred by way of collateral are the most commonly used types of collateral in this investment category. In order to establish a pawn, a pawn contract must be concluded and, in the case of a pawn entered, the pawn must be entered in the pawn record.
As regards the transfer by way of guarantee, the Civil Code provides that if the claim is acknowledged in writting, its transfer must also be acknowledged in writting. In order, however, to be valid against the bankrupt' assets of a guarantor, the transfer of ownership by way of surety should be concluded in the notarially authenticated date.
Is it possible to provide collateral for financing documents? And if so, what are the most commonly used types of collateral for this type of ownership and what is the process? Yes, collateral can be provided via the use of derivative financing instruments. However, they may only be provided for the benefit of supervised undertakings specified in the Act on Certain Types of Collateral.
Collateral may take the following forms: transferring the right to hold finance, freezing an account that holds it. To create a collateral arrangement, a corresponding arrangement must be concluded in writing. In addition, the law on collateral also provides that collateral must be recognised whose nature is dependent on the type of collateral arrangement used.
Another commonly used method of hedging a derivative contract is a recorded lien. In order to establish a recorded lien, a recorded lien must be concluded and entered in the lien registry. Is it possible to provide collateral in the form of liquid assets? And if so, what are the most commonly used types of collateral for this kind of ownership and what is the process?
Yes, collateral can be provided in the event of payment in real time. Securities most commonly provided through this investment category are a money block, a proxy on a wire transfer agreement and a payment in cash. 3. All that is required is a hard copy of a documentation establishing the above right of use. Is it possible to provide certainty about IP?
And if so, what are the most commonly used types of collateral for this type of ownership and what is the process? Yes, IP privileges can be used to provide protection if they are portable. A lien is the most commonly used type of collateral provided over this investment category. In order to establish a pawn, a pawn contract must be concluded and, in the case of a pawn entered, the pawn must be entered in the pawn record.
The lien on intellectual protective titles must also be indicated in the Polish Patent Office registry. Which are the joint trigger mechanisms for credit, guarantee and collateralisation? Credit enforcers differ from country to country, but the most frequent ones are non-payment and failure to meet commitments or assurances under the loan agreements (and the expiry of a guarantee term if agreed).
As regards the banking loan facility provided by banking institutions, the Banking Act provides that if the debtor does not meet the terms of the loan or if the debtor ceases to be creditworthy, the banking institution may decrease the amount of the loan or terminate the loan agreement, unless the provisions of the Banking Act provide otherwise.
As a rule, warranties are issued if the debtor does not settle its obligations under the contract that is covered by the warranty. This is also true for the safety documentation. It is not a hedging tool itself, but an accelerated judicial procedure for execution which takes the place of a judicial decision on the lender's claims.
Safety enforcing practices vary according to the nature of the safety. Registrated and pledged assets may be enforceable either through judicial execution or, if the lien arrangement so provides, through one of the out-of-court execution techniques set out in the Law on Registrated Liens and the Lien Register or, as the case may be, the Law on Collateral Securities.
It is of vital importance for the creditor to provide for such out-of-court means of enforcing a lien in the form of lien contracts, as this can avoid protracted legal procedures. Among these are: the lender's right to dispose of the pawned property and to settle his claims from the sales revenue. Upon assignation of interests by way of surety or upon chattel mortgaging of title (or upon default), the creditor owns the interests or property conveyed.
Bondholders are granted preferential treatment in the case of the borrower's failure, since the property which has been pawned or repledged or transferred by way of chattel mortgaging or by way of contract of sale is withdrawn from the bankrupt's estates and is used exclusively to pay these bondholders in accordance with their priorities.
Where that asset is not enough to settle all the debts in full, the rights of a lower-ranking real-holding believer shall not be met until all the rights of a higher-ranking real-holding believer have been met in full.
remuneration of employees, maintenance entitlements, indemnification for damage to life, limb or morbidity, national insurance premiums as they accrued prior to the opening of the bankruptcy procedure, and certain debts arising out of disputes arising during the course of the bankruptcy procedure (and fulfilment of certain conditions laid down by law); other debts not included in the other classes, in particular tax and other charges; debts owed by the members of the bankrupt partnership (the members are corporations or joint-stock companies) to the partnership out of a loan or similar debt (together with interest) provided by the members in the five years preceding the declaration of bankruptcy of the partnership, or similar debts (together with interest) in the five years preceding the declaration of bankruptcy of the partnership