Our note summarises key national forbearance measures and other reliefs related to the COVID-19 pandemic which have been introduced in various European countries and which are relevant in the context of structured finance transactions. Developments in this area are fast-changing. Please note the date on which the note was last updated.
In many cases the legislation, guidance or other materials relating to these measures is limited in detail. This means that in some instances questions remain about the scope of some of these measures.
While most governments have taken steps to mandate or encourage payment holidays or other relief for consumers and/or mortgage loans, the measures are not entirely comprehensive in all jurisdictions. This means that in some jurisdictions the governmental measure only apply to specific lenders or specific types of borrowers.
To-date, we are not aware of any measure which would address the impact of COVID-19 payment delays or payment holidays on securitisations or other asset-backed financings of these assets. As a result parties will need to consider their transaction documents to establish:
1. whether payment holidays or extensions which are not mandated by government measures or regulatory requirements can be made and/or whether existing servicing procedures would need to be amended to facilitate this.
2. how payment holidays are treated in any default or delinquency tests.
Clearly, these measures and/or the economic impact of COVID-19 may lead to increased losses and/or liquidity reserve or liquidity facility drawings under existing transactions.
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Hogan Lovells: Julian Craughan, Dennis Dillon, Tauhid Ijaz, Rachel Pleming Emily Reid, Roger Tym, Jon Chertkow, James Black, Julie Patient, Virginia Montgomery, Jose Luis Vazquez, Carlos Meijide, Robert Masman, Jan-Willem Boer, Pierre Reuter, Valerie Laskowski, Corrado Fiscale, Federico Del Monte, Giulia Arenaccio, Annalisa Feliciani, Sven Brandt, Julian Fischer, Dietmar Helms, Vincent Fidelle, Sharon Lewis, Katia Merlini, Laura Asbati, Reza Mulligan
For measures in Belgium: Werner Van Lembergen, Jean-Philippe de Vinck at Deloitte Legal
For measures in Greece: Athanasia Tsene, Lambros Belessis, Christos Paraskevopoulos Dimitris Roussis, Fotodotis Malamas, Katia Papantonopoulou at Bernitsas Law
For measures in Ireland Aiden Small, Niamh Nic Uileagóid, Maedhbh Clancy, Sinéad Cantillon at Arthur Cox
For measures in Portugal: Luis Branco at Morais Leitão.