Guarantees from multiple guarantors


Published by a ÀÏ˾»úÎçÒ¹¸£Àû Banking & Finance expert
Practice notes

Guarantees from multiple guarantors


Published by a ÀÏ˾»úÎçÒ¹¸£Àû Banking & Finance expert

Practice notes
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It is often the case that financing transactions require guarantees to be given by more than one guarantor. For example, guarantees might be required from a number of companies in a group to support group borrowings or from each of the Directors of a company to support Loans made to that company. In such cases it is important to be aware of:

  1. •

    the rights of the lender against the guarantors and, in what circumstances those rights might be diminished, and

  2. •

    the rights of each guarantor against its co-guarantors

How multiple guarantor guarantees are documented

Where a transaction involves more than one guarantor, the guarantee arrangements are typically documented either:

  1. •

    in one guarantee executed by all of the co-guarantors—this could take the form of either a single standalone guarantee document executed by all the co-guarantors (see for example, Precedent: Guarantee and indemnity: cross guarantee from group companies—bilateral—all monies) or specific provisions in the facility agreement to which all the co-guarantors would be a party, or

  2. •

    in several separate guarantee documents, one for each co-guarantor

See

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Jurisdiction(s):
United Kingdom
Key definition:
Directors definition
What does Directors mean?

A director of a company is responsible for the day-to-day management of that company. The directors make decisions on behalf of the company in order that it can carry on its business.

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