Financing Briefing: Changes to the LMA’s Leveraged Facility Agreement - HMRC’s Double Taxation Treaty Passport Scheme

HMRC announced in June the launch of its Double Taxation Treaty Passport ("DTTP") scheme for overseas corporate lenders who rely on a double tax treaty for relief from withholding tax on interest payments by or from UK borrowers. The DTTP scheme becomes operative on 01 September.

In our Financing Briefing: HMRC's Double Taxation Treaty Passport Scheme - what corporate borrowers need to know - June 2010 we outlined the background to the DTTP scheme, its main features and some of its potential implications for corporate borrowers and loan documentation.

The Loan Market Association recently published a revised version of its recommended form of facility agreement for leveraged transactions (the "Leveraged Agreement"). The substantive changes all relate to the new DTTP scheme. We expect this wording will be used in new investment grade as well as leveraged loan documentation going forward.

This briefing summarises the changes to the Leveraged Agreement and considers their implications from a Borrower’s perspective.

Andrew Balfour (partner), Graham Airs (partner), William Watson (partner), Kathrine Meloni (professional support lawyer)