With regard to trades carried out in accordance with the LSTA documentation, the applicability of oral transactions was codified in New York in 2002, when these transactions were carried out by the anti-fraud, subject to certain requirements.3 The LSTA`s commercial confirmations also provide that the parties agree, once they have made a commercial confirmation of the LSTA with uniform conditions for these credit transactions. , to agree on any other transactions between them with respect to the purchase or sale of bank loans under conditions (if by telephone) 4 Bank loan holders assume two types of credit risks: (i) the borrower`s failure to pay the underlying bank loan (which also applies to an assignment); and (ii) the occurrence of an insolvency event of the impented funder or the inability of the funder to meet its obligations under the participation agreement. A very important distinction between LSTA documentation and LMA documentation, which affects the second form of such credit risk, is the way in which the form of the LSTA and LMA participation agreements is structured. LMA-style holdings create a debtor-creditor relationship between the lender and the acquirer of the interest.26 In the event of default, the participant is treated as an unsecured creditor of the lender, with no economic share in the underlying loan. On the other hand, the LSTA`s holdings are supposed to allow for a real sale of the economic shares of the loan. In other words, under the LSTA`s holdings, the economic and economic interests of the loan are transferred from the loan to the member and not to a portion of the estate of the insolvent business. Under U.S. law, a typical LSTA participation agreement leads to the participant being considered the economic and economic beneficiary of the underlying loan. The mass of the donor`s bankruptcy is considered only as the owner of the simple legal property of the underlying loan. As a result, the underlying economic interest in the loan, 27 A participant in a formal participation agreement of the LSTA should have good reason to apply for an automatic stay exemption and increase his participation in a direct transfer of the underlying loan (provided that the participant is allowed to hold the loan as a direct agent in accordance with the underlying credit contract or the corresponding consents of the borrower). , final purchasers entering into LMA participation agreements often attempt to modify these documents to provide for an economic interest transfer to the loan to address this increased credit risk, in accordance with the AML documentation form.

However, the process for resolving troubled transactions differs for the LSTA and the LMA after a commercial confirmation has been completed. A commercial confirmation of the LMA is intended for two purposes: (i) documenting the agreement under the terms of trading on the date of trading; and (ii) as a purchase and sale agreement. Therefore, with respect to an emergency trade in the AML after trade confirmation, it is generally not necessary to execute subsequent LMA documents. This is not the case with distressed LSTA documentation. An unproductive commercial confirmation of the LSTA expressly provides that secondary credit trade is subject to acceptable « negotiations, execution and delivery of reasonable contracts.12 Regardless of the negotiating capacity of the negotiating parties to the negotiations, the standard conditions for emergency confirmation of the LSTA require that the parties essentially use a complementary sales contract in the form of the LSTA`s sale and sale contract for difficulty transactions. , as it is in effect on trading day.