PARALLEL DEBT IN CURACAO

New legislation

It has become market practice in Curacao, and also in the Netherlands, to create a separate (parallel) obligation, owed by the borrower (or guarantor) to the security agent in its own name, on the terms and in an amount equal to the original (principal) obligations owing by the borrower (or guarantor) to the lenders.

The security rights are then granted to the security agent in its own name to secure the parallel debt. This “parallel debt” structure is usually reflected in the facility agreement and gives the security agent an own and independent right to demand payment by …
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18
Feb 2012
CATEGORY

Finance

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THREE QUESTIONS ON ARUBAN BANKRUPTCY LAWS

FAQ

Question 1

In which cases and by whom may bankruptcy proceedings be initiated in accordance with Aruban bankruptcy law?

Filing for bankruptcy may be done either by the debtor itself or by one or more of its creditors. If the debtor is a company, generally speaking the managing directors do not have the authority to petition for bankruptcy of the company without authorization thereto from the general meeting.

The pre-requisites for making a bankruptcy order on application, regardless of whether the application is made by the debtor or by any of the other above mentioned persons, is, that the …
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13
Feb 2010
CATEGORY

Legal

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RESTARTING SECURITIZATION MARKETS IS CRITICAL

IMF: securitization can positively contribute to financial stability and sustainable economic growth

Although recent public opinion has focused on what went wrong with securitization, according to the International Monetary Fund (IMF), it is important to recognize the many benefits associated with sound securitization. Mobilizing illiquid assets and transferring credit risk away from the banking system to a more diversified set of holders continues to be an important objective of securitization, and the structuring technology in which different tranches are sold to various investors is meant to help to more finely tailor the distribution of risks and returns to potential …
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22
Sep 2009
CATEGORY

Finance

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STRUCTURING TRANSACTIONS IN THE DUTCH CARIBBEAN, THE SKY IS THE LIMIT

Example: Parallel debt structures under Dutch Caribbean law

In a parallel debt structure, a company (the borrower) acknowledges a debt to an appointed agent by promising to pay the agent an amount equal to the sum of the borrower’s obligations under the (syndicated) loan agreement with the lenders. Thus an independent, parallel debt is created between the borrower and the agent for which it is (further) agreed that this debt (not only becomes due and payable but also) will be considered paid and discharged at the same time and to the same extent as the underlying loans so that (of …
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07
Mar 2009
CATEGORY

Finance

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THREE QUESTIONS ON DUTCH CARRIBBEAN BANKRUPTCY LAWS

FAQ

Question 1

In which cases and by whom may bankruptcy proceedings be initiated in accordance with Netherlands Antilles bankruptcy law?

Filing for bankruptcy may be done either by the debtor itself or by one or more of its creditors. If the debtor is a company, the managing directors do not have the authority to petition for bankruptcy of the company without authorization thereto from the general meeting, unless otherwise stipulated in the articles of association.

The pre-requisites for making a bankruptcy order on application, regardless of whether the application is made by the debtor or by any of the …
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16
Dec 2008
CATEGORY

Legal

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