On 23 March 2017, the National Bank of Ukraine (NBU) adopted amendments to its regulations regarding the registration of cross-border loans, as described further below.
In particular, the following changes will come into force as of 10 April 2017:
The effective date rule for the assignment of claim rights is cancelled
The requirement that an agreement regarding the cross-border assignment/transfer of claim rights only comes into force upon registration of the loan agreement with the NBU has been cancelled.
Despite this, the relevant agreement must nonetheless be registered with the NBU prior to any cross-border payments being made to the new lender, as the borrower’s Ukrainian servicing bank would not be allowed to carry out such payments to the new lender until its registration.
The new lender should bear in mind that the NBU’s requirement regarding the maximum interest rate for cross-border loans (i.e., that all fees, interest, penalties etc. under such loan may not exceed the maximum interest rate established by the NBU) would apply.
Waiver from loan interest is allowed
The new lender may now unilaterally waive its rights to receive interest (in full or partially) under an assigned domestic FX loan agreement in order to comply with the maximum interest rate requirements. Previously such option was not available, and amendments to the underlying loan agreement were required to bring the interest rate into compliance with these requirements.
The lender/servicing bank may now apply for NBU registration
Registration of amendments to cross-border loan agreements may now be initiated either per application of the borrower or per mutual application of the lender (new lender) and the borrower’s servicing bank in certain cases (e.g., in case of assignment of claim rights under the loan agreement).
Previously, such application could only be submitted by the borrower, which permitted abuse by uncooperative borrowers.
Syndicated loan registration rules amended
If a Ukrainian borrower receives a syndicated loan from a foreign bank and a Ukrainian bank, and payments under such loan are serviced through a foreign bank (facility agent), the loan agreement is subject to registration with the NBU in respect of the entire loan amount, and the maximum interest rate requirement then applies in respect of the entire loan amount as well.
Cross-border debt restructuring transactions
In case of purchasing of a lender’s claim rights under several cross-border loans with a Ukrainian borrower and further consolidating those rights under a new single cross-border loan agreement (by way of novation), such new loan agreement should then be registered with the NBU and the previous loan agreement registrations should be cancelled.
Rules for cancelling NBU registration changed
The cancelation of the cross-border loan’s registration will occur per NBU’s discretion (not automatically as were previously provided); the grounds for the cancelation will also be changed.