Direct Lending in Spain: Different Modalities and Market Trends

The debate focused on topical issues related to Direct Lending and was chaired and moderated by Joaquín Gonzalo, a partner at Montalbán, and Ander Valverde, a lawyer from the Banking and Financing team at Pérez-Llorca.

Alfonso Erhardt, one of the founding partners of Oquendo Capital, and Miguel Lasso de la Vega, Director of HIG Whitehorse, examined whether debt funds are complementary to or represent competition for traditional banking. They also discussed the different aims of direct financing and if these necessarily have a specific purpose (Event-driven).

Both directors expressed their views on the flexibility of Direct Lending regarding banking covenants and whether or not there is room for purely corporate and working capital financing or for the different structures of this type of financing.

The speakers talked about the experience of their respective organisations, the different forms of Direct Lending (senior, unitranche, mezzanine, etc.), their perception of the progress in the market and the future of direct loans in Spain.

Lastly, certain legal matters were discussed, such as the law applicable to these financings and the recurring question of whether recourse to English or Luxembourg law is a requirement or a choice in these structures. The “double Luxco” guarantee structures and the specific nature of insolvency concerns were then analysed.