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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