Asset-based finance transactions of all types more and more often include components that require knowledge of the business practices and legal concepts of more multiple sovereign jurisdictions. As with any loan facility, lenders underwrite the loan to a certain level of risk based upon certain assumptions. Those assumptions include clarity of legal rules and practices applicable to the loan and the availability of institutions and mechanisms to enforce contractual and legal rights. Asset-based finance, in particular, because of its inherent focus on assets as a primary mechanism for repayment of a loan facility, requires a lender and its counsel to navigate and validate these risk assumptions by becoming familiar with issues that impact the creation, priority and enforcement of liens against those assets which are to become the lynchpin of a successfully structured asset-based loan facility.
This program will focus on three sovereign jurisdictions: Canada, England and the United States. While these three jurisdictions share many common traits that make a transaction with elements involving any two of the three jurisdictions manageable, one should not assume that all business, practical and legal concepts are the same. Indeed, even among these three jurisdictions where the majority of the populations share a common language, miscommunications and misinterpretations can arise. Even where similar terminology is used, there are nuanced differences in underlying concepts.