For many years, the application of facilities agreements on the basis of the LMA standard has been widespread in the Polish market. The LMA standard has been met for transactions documented by English and Polish law. In the case of large capital transactions in which the main consortium includes foreign lenders, including international financial institutions such as the EBRD and the EIB, the parties are more likely to resort to facilitation agreements under English law. In the case of medium cap transactions and transactions involving only Polish banks, in particular to avoid additional legal costs, the facilities agreements, although based on the LMA standard, are often subject to Polish legislation. Banks and law firms have more or less developed their own models on the basis of the LMA form. When it comes to specific provisions of the LMA, which need to be amended to comply with the mandatory Polish legislation, various solutions are proposed. This approach was continued with the development of standard LMA documentation based on standard LMA documentation by the Polish Banking Association (ZBP), a standard Polish standard version of an facility agreement. The standard ZBP form is not an official LMA document, but it was developed with the agreement of the LMA. This is not only a transposition of the LMA form into Polish law, but also a translation of the LMA type form into Polish. The aim was to adapt the documentation of the AML to the requirements of local law, where possible, by maintaining, as far as possible, the form and content of the English legal documents of the LMA.
Although the use of standard LMA forms is widespread in EEC jurisdictions, in many cases the legislation in the LMA-based facility agreement is adapted to local law and LMA forms are modified accordingly to comply with mandatory local rules. Therefore, transposing a common law document into the laws of civil courts can be difficult. In some countries, initiatives have been taken to further harmonize credit documentation at the local level. The objective of this guide is to provide an overview of the role of the secondary market in the syndicated credit market and to identify, among other things, active participants in the secondary credit market, available debt securities, the typical anatomy of a trading and the various transfer mechanisms. The LMA`s approach to updating its “It`s LMA” facility agreements is the preferred justification of any bank lawyer for a negotiating position, and British banks are increasingly asking their lawyers to prepare LMA-format facility agreements. But what is “LMA”? The Loan Market Association (LMA) publishes two types of recommended facility agreements: Investment Grade and Investment Funds (LF). As Adam Pierce explains, there are some retail issues that are only in the LF agreement and should be included in the facility agreements, regardless of the type of transaction. At first, borrowers and bankers struggled to understand the terms of standard AML forms.
A negotiation strategy based on the argument that the wording of an “LMA standard” clause was well received was not well received. Today, even though they are still unhappy about having to negotiate a 100-page document, borrowers are more familiar with LMA standards. One reason is that Slovak language versions of forms are to some extent standardized, making negotiations easier for borrowers. The standard LMA forms amended with regard to Slovak legislation are frequently used in the Slovak Republic, particularly for large-scale and complex transactions (clubs and syndications). Depending on the type of financing, forms of investment degree, leverage or real estate are used.