Posts by Christofer C. FatteyPartner
Canadian lenders and banks with U.S. subsidiaries routinely engage in cross-border construction financing for real property projects located in New York. Typically, these loans are structured to manage the cross-border nature of the transaction by utilizing the borrowers’ U.S.-based affiliates or subsidiaries to grant the mortgage and security interest in the real property and improvements located in New York. Similar to U.S.-based lenders, Canadian lenders often require experience, strong liquidity, and market feasibility studies, as well as detailed construction ...
Canadian lenders engaged in cross-border financing frequently require their borrowers’ US affiliates to grant security interests in their assets. The standard practice involves using U.S.-law-governed security agreements for these US entities. However, sometimes Canadian lenders or their Canadian counsel will request that a Canadian General Security Agreement (GSA) be “converted” to a US security agreement. While the desire for contractual uniformity across all cross-border obligors is understandable, relying on a poorly converted GSA can lead to serious negative outcomes and often overlooked legal risks.