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Loan Sale Agreement for Hong Kong

Loan Sale Agreement Template for Hong Kong

A Hong Kong law-governed agreement used to document the sale and transfer of loans from one party (seller) to another (purchaser). The agreement covers the terms of the sale, including purchase price, representations and warranties, conditions precedent, and completion mechanics. It ensures compliance with Hong Kong legal requirements for loan transfers, including those under the Law Amendment and Reform (Consolidation) Ordinance and Banking Ordinance. The document addresses both the assignment of rights and the assumption of obligations related to the loan(s), while incorporating necessary provisions for data protection, regulatory compliance, and notice requirements under Hong Kong law.

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Loan Sale Agreement

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What is a Loan Sale Agreement?

The Loan Sale Agreement is a crucial document used in Hong Kong's financial markets when transferring loan assets from one entity to another. It is particularly relevant in scenarios involving portfolio sales, debt trading, or strategic divestments by financial institutions. The agreement must comply with Hong Kong's legal framework, particularly the Law Amendment and Reform (Consolidation) Ordinance for valid assignments, the Banking Ordinance for regulatory compliance, and the Personal Data (Privacy) Ordinance for data protection. This document typically includes detailed provisions on the loan assets being transferred, purchase price mechanisms, representations and warranties, and completion procedures. It is essential for various transactions, from single loan transfers to complex portfolio sales, and must address both the transfer of rights and novation of obligations while ensuring all regulatory requirements are met.

What sections should be included in a Loan Sale Agreement?

1. Parties: Identifies the seller and purchaser of the loans

2. Background: Sets out the context of the transaction and brief description of the loans being sold

3. Definitions and Interpretation: Defines key terms and establishes interpretation principles

4. Sale and Purchase: Core provisions regarding the sale of the loans and related rights

5. Purchase Price and Payment: Details the consideration and payment mechanisms

6. Completion: Specifies the completion mechanics and timing

7. Seller's Representations and Warranties: Warranties regarding the loans, seller's capacity, and authority

8. Purchaser's Representations and Warranties: Warranties regarding purchaser's capacity and authority

9. Pre-Completion Obligations: Obligations of parties between signing and completion

10. Post-Completion Obligations: Ongoing obligations after completion, including document delivery

11. Further Assurance: Obligations to take additional steps to perfect the transfer

12. Confidentiality: Provisions regarding confidential information and announcements

13. Data Protection: Compliance with PDPO and data handling requirements

14. Notices: Process for serving notices between parties

15. Assignment and Transfer: Restrictions on further assignment of rights under the agreement

16. General Provisions: Standard boilerplate provisions

17. Governing Law and Jurisdiction: Confirms Hong Kong law and jurisdiction

What sections are optional to include in a Loan Sale Agreement?

1. Security Assignment: Required if the loans are secured and security interests are being transferred

2. Servicing Arrangements: Required if there are changes to loan servicing arrangements

3. Foreign Law Compliance: Required if loans involve foreign elements or borrowers

4. Tax Provisions: Detailed tax provisions if complex tax implications exist

5. Currency Provisions: Required if loans are in multiple currencies

6. Step-in Rights: Required if purchaser needs rights to step into existing arrangements

7. Regulatory Compliance: Specific provisions if either party is regulated

8. Portfolio Management: Required for sales of multiple loans requiring ongoing management

What schedules should be included in a Loan Sale Agreement?

1. Schedule 1 - The Loans: Detailed list and description of loans being sold

2. Schedule 2 - Completion Requirements: List of documents and actions required for completion

3. Schedule 3 - Form of Transfer Certificates: Template documents for effecting the transfer

4. Schedule 4 - Seller's Warranties: Detailed warranties regarding the loans and related matters

5. Schedule 5 - Notice to Borrowers: Form of notice informing borrowers of the transfer

6. Schedule 6 - Loan Documents: List of all relevant loan documentation being transferred

7. Schedule 7 - Power of Attorney: Form of power of attorney if required for perfection

8. Appendix 1 - Calculation of Purchase Price: Methodology for calculating the purchase price

9. Appendix 2 - Due Diligence Findings: Summary of due diligence results and disclosed matters

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Hong Kong

Document Type

Service Agreement

Cost

Free to use
Relevant legal definitions














































Clauses































Relevant Industries

Banking

Financial Services

Investment Management

Private Equity

Asset Management

Debt Collection

Real Estate Finance

Corporate Finance

Distressed Debt

Special Situations Investment

Relevant Teams

Legal

Finance

Risk Management

Treasury

Compliance

Credit

Portfolio Management

Investment

Corporate Development

Operations

Relevant Roles

Legal Counsel

Finance Director

Chief Financial Officer

Risk Manager

Portfolio Manager

Investment Director

Compliance Officer

Treasury Manager

Credit Manager

Transaction Manager

Senior Banker

Debt Investment Manager

General Counsel

Banking Partner

Finance Associate

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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