Debt buybacks i syndikatlånemarkedet

Maja Nyborg Hammel

Studenteropgave: Kandidatafhandlinger

Abstrakt

The thesis investigates debt buyback (DBB) as a phenomenon, including the contractual regulation. DBB means that debtor buys its own debt back below par. The phenomenon is linked to the syndicated loan market where loans are issued, and then traded on the secondary loan market. DBB appeared in connection to the financial crisis where the price on syndicated loans fell, which allowed speculation. The speculation challenged the contractual framework at that time. Syndicated loan contracts are a very standardized type of agreement, which are made on the basis of model contract documents formed by the trade association Loan Market Association. The thesis explains the phenomenon DBB and analyses what consequences the different types of DBB have for the involved parties. After this it is analysed whether or not DBB is permitted under the model contract documents before the imposition of the contract’s clause 30, which regulates DBB in the future. Finally the model contract document’s clause 30 is analysed. The thesis concludes that DBB covers many different types of transactions, which are a combination of who the transferee is, what happens to the debt after the transfer, and how the DBB is financed and executed. The consequences for the involved parties, depends on what combination of the aforementioned factors that applies in the DBB transaction and linked to debtor’s bankruptcy risk. In addition, it is concluded that DBB wasn’t to be considered a breach of contract under the old model contract. However, this depends on the possibility to redefine the transfer from a change of lender to a prepayment, which can depend on whether the interpretation of the contract is in accordance with English or Danish law. The thesis gives concrete suggestions to changes in clause 30, which implies a higher degree of efficiency for the parties. Finally, the thesis concludes that DBB can be seen as providing a higher degree of flexibility, for both creditors and debtors. Both parties are dependent on adjusting to the current market situation, and here DBB can be an advantage, since it generates increased value for both parties. As a remaining creditor, there are few risks associated with DBB, and they can be eliminated by a sensible regulation for DBB in contracting procedures.

UddannelserCand.merc.jur Erhvervsøkonomi og Jura, (Kandidatuddannelse) Afsluttende afhandling
SprogDansk
Udgivelsesdato2013
Antal sider89