Reviewing foreign law security documents

Generally, counsel acting both for the borrower(s) and lenders will want to review foreign law security documents.

This can occur where a group company in another jurisdiction grants security over its assets or where an Australian company owns assets located in another jurisdiction.

This guidance note examines the key issues for counsel acting for the sponsor/group when reviewing foreign law security documents, including:

• • compliance with the agreed security principles (if applicable);
• • covenants and costs obligations (to ensure they are not too unduly onerous); and
• • that representations are in line with those in the facilities agreement,

and the key issues for counsel acting for the lenders, including:

• • compliance with agreed security principles (if applicable); and
• • that the drafting of the security document(s) is correct, in particular:
• • ◦ that the correct assets are secured;
• • ◦ that the correct parties benefit from the security; and
• • ◦ that all relevant loans are secured.

Lenders' counsel will also ensure that they are fully aware of any laws in the relevant jurisdiction that might impact on the value of the security or make it hard to enforce, eg signing and perfection issues.

See Reviewing foreign law security documents.