Luxembourg’s newest creditor-friendly tool ‘professional payment guarantee’ (PPG)
Luxembourg’s newest creditor-friendly tool 'professional payment guarantee’ (PPG) has been assessed. The PPG undoubtedly reinforces the legal certainty of the Luxembourg independent guarantees and grants it long-awaited statutory recognition. However, its contractual flexibility and bankruptcy remoteness should make it a frequently used tool, but it seems its attractiveness for creditors has not yet been noticed internationally.
The PPG was intended to compensate for the shortfalls of suretyships and lack of statutory authority for the independent/first demand guarantees, creating a credit-friendly tool complementing well-known Luxembourg financial collateral arrangements. Unfortunately, it appears that the PPG is still rarely used in both national and international transactions. A true let-down for the Luxembourg government.
In this article published by Legal 500 in their In-House Lawyer magazine Summer 2021 edition, our authors re-assess the use of this tool in the current context (Brexit, COVID…) and its benefits for national and international markets.
More particularly, the key points addressed are the following:
- The current situation of the new tool;
- Its benefits and impact on the legal certainty;
- The national and international market conditions;
- Experts’ vision about the future.
To read the full article click here.
Anne-Marie NicolasPartner Attorney at Law / Avocat à la Cour
Anne-Marie Nicolas, partner, is a member of the Banking & Finance Practice Group in our Luxembourg office. She co-heads the Luxembourg Restructuring Team. Anne-Marie focuses on secured lending, including acquisition finance and real estate finance, as well as debt restructuring.T: +352 466 230 314 E: [email protected]
Elie-Raphaël SoudryCounsel Attorney at law
Elie-Raphaël Soudry, counsel, is a member of the Banking & Finance Practice Group in our Luxembourg office. He focuses on secured lending, including acquisition and real estate finance as well as transportation finance.T: +352 466 230 320 E: [email protected]