Personal Money Lenders

Private money lenders

Financing and guaranteed loans in Norway How is the credit situation in your jurisdictions at the moment and have new tendencies developed over the last 12 month? In recent years, the Lithuanian economy has been affected by the downswing in the petroleum and petroleum services sector, at the same time as falling from more than $110 per billion in 2014 to less than $30 per billion in 2016, before stabilizing at around $50 per billion in April 2017.

The decline in the cost of crude oils, however, also affected the value of the Nordic exchange rate; foreign purchases (largely financed by Norway ) therefore stayed at a high base during the downswing in the petroleum industry (although the majority of purchases took place in other industries such as property and technology).

In recent month there have been first indications of consolidating the services sector, which is likely to need to be split between a few strong actors in order to restore viability in an increasingly difficult context. Yes, Norway has an authorisation system which does not allow the promotion and implementation of loans on the ground in Norway or on a cross-border base from abroad to Norway without an authorisation from the Norwegian Financial Supervisory Authority.

Since Norway is part of the European Economic Area (EEA), EU licensee companies can "submit" their licenses from other EU countries to Norway. In addition, the granting of credit to Norway on the opposite terms - if the credit takes the form of an action by the debtor and not by the creditor - is regarded as permissible, although this is not specifically provided for under Danish Acts.

There is a large bond and collateralised bond markets in Norway and credit by the purchase of loans, debt certificates and similar instruments is not a regular business. Is there a particular set of regulatorial questions that a potential creditor should consider when agreeing or concluding a collateralised credit arrangement?

As Norway is part of the EEA, in Norway mainly EU legislation is in line with EU requirements for regulation and legislation in the financial and banking sectors (although transposition may be delayed in certain areas). In 2017, the EU Bank Recovery and Decision-Making Directive (2014/59/EU) is due to be transposed into Norway's legislation.

Furthermore, as in EU countries, the question of the UK's withdrawal from the European Union and its implications for Norway's ability to lend internationally via the London mortgage is a question of further evaluation and focusing. Norway's biggest lenders are Nordic bankers; Norway's biggest lender, DNBank ASA, is the biggest provider on the Danish banking sector and Sweden's Nordea Banka AB (publ) is the second biggest.

SEB, Swedbank and Handelsbanken, mainly credit providers from their subsidiaries in Norway, are also important actors, as is Danske Bank A/S, which also has a large subsidiary in Norway. Specialised in the maritime and off-shore sector, ABN AMRO and DVB Bank were also present on the Norway markets.

Non-banking banks operate in the debt securities markets, which do not require a license to lend. Yes, the most common way to document Norway's funding of any scale is through credit agreement credit markets. Borrower trades are conducted on the basis of the Nordic Borrower Term Sheet issued by Nordic' ASA, the Nordic Borrower's Trust, which serves as the borrower's custodian for most issues under the laws of Norway.

Yes, bank loans and syndication are standard practice in Norway. In your jurisdictions, does the Act allow a Facilities Officer to be nominated to act on account of other members of the Consortium? Yes, the functioning of the Norway port is similar to that under British legislation. One or more authorised leads arrangees structure and negotiate the transaction, one of which also acts as facilitator for all financing partners.

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? Norway does not accept the term "trust" as used in British legislation, but it is possible that one unit holds collateral both for itself and for others.

Thus, trade collateral is maintained by a collateral officer who is mandated to act on account of all financing counterparties. It may be one of the participating financial institutions in the operation or an autonomous unit (e.g. Nordic Trustee ASA, which is often designated as safety officer in combination banking and borrowing structures).

In the case of collateralised financial operations for SEVs (Special-Purpose Vehicles, SPVs), is it customary to use the funds to be funded for the safekeeping of financial instruments? As a rule, would collateral be provided for the SPV or would lenders demand immediate collateral? In Norway, the SPV s are often used to fund property, marine and petroleum services in order to separate the value of the property to be funded.

As a rule, lenders require collateral both for the SPV units and for the assets held by the SPV. Does the interest most frequently come from a basic interest payment or a customary benchmark interest payment (e.g. LIBOR, EURIBOR or HIBOR)? Yes, Norwegian banks usually charge interest at fixed interest margins and express the interest charged at the respective offer price plus a spread.

Lending in SEK is based on the interbank offer interest rates. Norway's banking institutions are also major lenders in euro and US dollar, as many of Norway's biggest companies have exports in foreign currency. Do warranties apply in your jurisdictions? Yes, guaranties are possible and customary for Norway.

Warranty obligations are initially a legal arrangement under Danish legislation, often formulated as a unilateral commitment to make payment to a particular recipient. Warranties may, however, be strictly regulated by information requirements both before and during the period of the warranty in order to be applicable to the sponsor.

Does legislation influence or limit the provision or enforcement of warranties in your jurisdictions (e.g., up-stream warranties)? Apart from the above information requirements, the acquired company may not, with some exemptions for property corporations, provide additional funding to Norway in relation to the purchase of its share.

As a result, it is not possible to reduce debts and obtain advance warranties and securities from business combinations in Norway under the applicable regulations. It has been proposed to weaken the stringent Norway regime for providing support for takeovers, although there is no clear timetable as to when the regime can be amended.

Outline the most popular ways to structure the priorities of debt and collateral. Norway's banking finance is generally geared towards first-rate collateral, while junior debt is often seen on an uncollateralised footing (e.g. seller credit in the context of acquisitions). Is there any tax, stamping tax or other charge to be paid when a credit, surety or interest is provided or enforced?

For the registration of securities in Norway only nominee charges are due. It is more usual for it to be governed by domestic laws that regulate the conditions of the plant record, or is the laws of another jurisdication often chosen by the contracting party (e.g. British or New York law)? Norway's legislation is most frequently applied as the applicable legislation on plant documents in Norway, even if a non-Norwegian banking institution acts as a facilities agency.

Certain operations are governed by the laws of England, particularly when arranging from the London Stock Exchanges. Is there any restriction on lending by or the provision of collateral or guaranties to overseas lenders? Is there any control on currency that restricts payment to a non-resident creditor under a securities instrument, bond or credit 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? However, the effect may be more or less the same for different investment categories through the use of multiple collateral arrangements.

How do you formalise the release of collateral for the most popular types of investment? The securities entered in an officially kept record must be cleared by lodging a statement of cancellation in the initial document in which the securities are entered and then the originals, together with the cancellation, are lodged with the competent record office.

Securities owners must therefore keep an eye on the initial documents for later clearance, as the losing documents moratorium lawsuit will take several month (it is a judicial proceeding to make sure that the losing document is actually missing and not transmitted to an undisclosed third party). Is it possible to provide collateral for property?

And if so, what are the most commonly used securities for properties and what is the process? Yes, securities can be provided for properties. It is entered in the Norwegian land register on the original document. Is it possible to guarantee safety for machines and plants? And if so, what are the most commonly used types of collateral for this type of ownership and what is the process?

Yes, movable loads can be entered in the Norway Furniture and Equipment Registry for both machines and equipment (i.e. equipment) and fixtures. Those interests are provided by variable fees based on the standardised model of the Norway Movable Property Registry. In addition, it is possible to record the collateral for certain asset values entered in other physical registries organized according to the individual elements (e.g. rolling stock, aeroplanes and ships).

Is it possible to provide collateral for claims? And if so, what are the most commonly used types of collateral for this type of ownership and what is the process? Yes, collateral for claims can be provided in two ways: Variable interest can be provided on accounts receivable by entering a variable fee in the Register of Movables in Norway.

There is a condition for both kinds of securities that the exposure concerned may be transferred or disposed of to a third person (which is the legal exposure under the laws of Norway unless expressly otherwise agreed). Is it possible to provide collateral for financing documents? And if so, what are the most commonly used means of collateral for this type of ownership and what is the process?

Yes, collateral can be provided for all types of instruments (e.g. equities and bonds). Proceedings may differ although Norway has transposed the EU Directive on collateral arrangements (2002/47/EC), which provides an efficient means of enforcing it. 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 type of ownership and what is the process?

Yes, it is possible and usual to have safety over payments in money by debiting a bankaccount. Contrary to some jurisdiction, it is not necessary to lock the safekeeping deposit in order to obtain mature collateral, which means that the funds to be secured may be either a locked deposit or a pending fee via a banking deposit and that any funds paid into the safekeeping deposit from period to period are available to the chargeor until the securities owner chooses to lock the funds after a failure.

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 is generally regarded as part of a company's capital employed and debited as part of the variable fee for capital employed.

There may be a right of lien for Norwegian and Norwegian patented inventions and registrations. Which are the joint trigger mechanisms for credit, guarantee and collateralisation? In Norway, the most commonly used eligibility requirements are based on the Loan Market Association's model of late payment, where the debtor continues to be notified of termination.

Which are the most commonly used means of enforcing? Is there a set of special rules that lenders must meet? It depends on the kind of safety. As the most efficient means of collateralisation, money or instruments can be provided quickly by notifying the borrower of a violation of contractual conditions.

Collateral against other investment categories is usually governed by execution procedures, as provided by statute with the support of the execution agencies. In the case of a bank in Norway, the bank in Norway has a legal right of pledge over the bank's bank in respect of the bank's debt and the bank in Norway has a legal right of pledge over the bank in respect of the bank in Norway.

Legal pledges take precedence over all other pledges or interests in the respective assets, irrespective of whether these other pledges or interests were established on a voluntary or involuntary basis. However, the legal pledge is restricted to a limit of 700 x the judicial charge (currently 734,300 NKr) for all securities entered in the land register and organized by the individual lots.

Otherwise, no legal entitlements shall constitute a non-terminable interest rate. Lithuanian legislation regulates in detail the order in which income from the uncollateralised property of a borrower is paid during insolvency procedures.

Mehr zum Thema