As part of its asset quality review, the European Central Bank has identified non-performing loans totalling over €850bn held by the banks directly supervised by it. Banks are likely to be encouraged to reduce those exposures as the cost to them of holding regulatory capital-hungry loans rises. Banks' commercial objectives may also drive deleveraging as they potentially seek more generally to de-risk, or even withdraw from the market, in certain sectors, jurisdictions or asset classes. These conditions present purchasers with a wide range of investment opportunities. A detailed understanding of the market is essential to maximise such opportunities.

Our report examines two key elements for navigating the European loan portfolio market:

1. Structuring and execution issues to consider – an assessment of key acquisition, structuring, security and due diligence issues
2. Financing issues – a look at potential financing structures and critical negotiation points

Linklaters' European Guides to Loan Portfolio Transactions

Jurisdiction-specific requirements are highlighted in Linklaters’ European Guides to Loan Portfolio Transactions.

• Licences to lend and transfer of security agent/security interests
• Enforcing security

Note: These guides are subject to change as a result of legislative reform in certain jurisdictions.

If you would like to discuss our findings in more detail please contact us.