A participant in an LSTA participation agreement should have good reason to apply for an automatic stay exemption and increase his or her participation in a direct transfer of the underlying loan (provided that: the member has the right to hold the loan as a direct transferee in accordance with the underlying credit contract or the borrower`s corresponding consents.28 It is not uncommon for final purchasers entering into LMA participation agreements to often attempt to modify these documents to provide for a transfer of economic interest in the loan to remedy this increased risk, in accordance with the AML documentation form. Similarly, English jurisprudence shows that oral agreements on credit trade can be enforceable: 5 The LMA documents expressly provide, under standard conditions, both for the same rank and for bank debt transactions in the event of default, that a binding contract between the parties will enter into force “by verbal or written appointment” essential conditions on the agreed date.6 Notwithstanding the fact that, in both New York and English law, it may be possible to ensure oral or electronic communication between the parties without written confirmation. The application of such communication can be difficult and depends on an analysis of the facts and circumstances7. Parties are therefore invited to keep internal written records of all agreed transactions and to endeavour to formalise the terms of a secondary credit transaction without delay on the basis of written confirmation of the trade or electronic notification. Since LSTA and LMA transactions on oral or electronic communications may become mandatory before formal written confirmation is signed, a party wishing to enter into a bank debt contract with a counterparty must be careful to do its homework and duties in advance before accepting the essential conditions. A party must ensure that it refers, when communicating with a counterparty, to the appropriate borrower/debtor in the capital structure of a business family and must: (i) if there has been a payment or late payment under the credit contract; (ii) if the credit contract provides guarantees (and if collateral is pledged or is granted to lenders, if a party is ordered to pay a fee upon the acquisition of that debt in order to remain in good shape after the conclusion of the trading)8; (iii) the status of an insolvency proceeding (if any) with respect to the borrower/debtor; (iv) transfer obligations imposed by the current credit agreement (e.g.B. the company purchasing the loans may have a legal right or the parties will be required to pay an equity or sub-participation); v) the law applicable to the credit contract (for example. B may prohibit or limit certain companies that become lenders); and (vi) the borrower`s organizational sovereignty (z.B. may be subject to withholding tax on payments, depending on the borrower`s jurisdiction).