Despite growing economic uncertainty, favourable and favourable conditions for borrowers in the German credit market appear to be continuing for the time being. A number of developments in the most recent literature have focused on gaps in standard financial documentation, which were simply too narrow for borrower groups to thrive and grow. We would expect them to stay. On the other hand, a growing number of restructuring situations and concerns about the overall economic outlook could lead to more robust covenant protection for lenders in new financial documents. Debt Funds will continue to provide a significant and even growing share of financing in the small and medium-sized sector, while the predominance of banks as arrangers and sub-writers will continue in the mid-cap and upper-cap segments. Interest payments under loan agreements are subject to German corporation tax when the lender is established for tax purposes in Germany, which, together with the solidarity supplement, is 15.825 per cent. In addition, the business tax levied by the municipalities and the rate set by the municipalities (between 7 and 18% approximately) apply. We draw attention to the fact that, in the event that the borrower redeems debts arising from loan agreements, the assignment or transfer of the repurchased liabilities from the borrower may result in their extinction, on the basis of the German principle of confusion (i.e. extinction due to the identity of the creditor and the debtor). There are, however, certain exceptions to this principle, in particular where the claim in question is securitised in a loan. While an initial overprotection always invalidates a guarantee agreement, in a scenario where overprotection only appears during the term of a loan (for example.

B by the planned repayment of credits), the cover agreements are not considered null and void. According to case law, the guarantor of guarantees that provide for a guarantee of a nominal value greater than 150% of the guaranteed liabilities and a realisable value of more than 110% of the guaranteed liabilities initially, but over the duration of the guarantee, is entitled to require the release of part of the guarantee until the value of the collateral falls below the thresholds. Due to the impracticability of release and the potential restoration of security, such a right to release is rarely exercised in practice. Directive 2011/61/EU (alternative investment fund manager) was also transposed into German law in July 2013, following the entry into force of the Investment Code (KAGB). Therefore, the acquisition of substantial stakes in unlisted companies by private equity funds is subject to reporting and disclosure obligations (e.g. .BĀ§ 298, 290 KAGB). Lenders usually focus on payment mechanisms (e.g.B. agreements on deferred purchase prices or deposits, if any), the purchase price formula (e.g. B locked box or closed accounts), closing conditions and procedures, long shutdown date, termination rights, warranties and guarantees and all rights of suppliers that survive conclusion (including supplier financing). .