{"id":124206,"date":"2026-01-09T09:59:56","date_gmt":"2026-01-09T09:59:56","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=124206"},"modified":"2026-01-21T08:43:22","modified_gmt":"2026-01-21T08:43:22","slug":"sweden-acquisition-finance","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/sweden-acquisition-finance\/","title":{"rendered":"Sweden: Acquisition Finance"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-124206","comparative_guide","type-comparative_guide","status-publish","hentry","guides-acquisition-finance","jurisdictions-sweden"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Snellman<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2024\/12\/Snellman-Logo-Liggande-Bla_webb-1.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Snellman<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2024\/12\/Snellman-Logo-Liggande-Bla_webb-1.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Acquisition Finance laws and regulations applicable in Sweden<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the trends impacting acquisition finance in your jurisdiction and what have been the effects of those trends? Please consider the impact of recent economic cycles, Covid-19, developments relating to sanctions, and any environmental, social, and governance (\u201cESG\u201d) issues.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The ongoing direct and indirect effects of the financial stress caused by the current macro environment, including global tariffs (notably U.S. import duties), inflation and the geopolitical instability following Russia&#8217;s invasion of Ukraine in February 2022 and the general international turmoil are still somewhat noticeable in the Swedish economy as a whole and in relation to acquisition finance. The impact of these events led to significant volatility in the Swedish credit markets and high inflation rates, despite the Swedish central bank lowering the policy rate throughout 2025. Sweden entered a recession in 2023 and the recession is still ongoing in 2025. Early in 2025, there were some indications of economic recovery, however, this was moderated by global tariff measures and subdued export demand. By the end of 2025, economic activity shows signs of improvement, although some uncertainty remains and default rates are still somewhat high in 2025 (although we deem them lower than previous years).<\/p>\n<p>The high-yield bond market, which has been somewhat closed, especially for real estate companies, has recovered, most likely due to falling interest rates and maturing outstanding bonds and the market is now having a better understanding of which entities seem to be in a good financial condition. The primary and secondary market for higher quality bonds is also recovering.<\/p>\n<p>Debt funds are currently experiencing intra-competition and competition from banks seeking to regain market share. In recent years, we have seen an increase in lending activity by debt funds and loan originating funds in Sweden, both in acquisition financing and corporate lending. This activity by funds is largely unregulated from a prudential point of view, and EU law does not currently prescribe any harmonised rules for funds that originate loans. Although there are rules on liquidity management, the use of leverage and valuation to manage risk at the fund level, there are no rules specifically aimed at debt fund lending at the Swedish or EU level.<\/p>\n<p>However, the legal landscape in this area is expected to change as the the EU has now adopted amendments to the Alternative Investment Fund Managers Directive (AIFMD II) which will amend the current AIFMD and apply from April 2026. AIFMD II introduces new requirements for loan-originating AIFs and are to be implemented by Member States in the coming years.<\/p>\n<p>In terms of trends in the ESG area, greenwashing continues to be a concern for the Swedish FSA and remains a supervisory focus in 2025. In addition, greenwashing is also highlighted at the EU level, particularly following ESMA\u2019s updated guidelines on the use of ESG and sustainability-related terms in naming of funds, which became fully applicable in May 2025. In light of these developments, we expect greenwashing to remain a regulatory focus in the EU and Sweden in the short- and medium-term future. We note that ESG-related covenants and ratchets are a part of the debt packages that we see today.<\/p>\n<p>Banks say that they are willing to meet the borrowing needs of companies, it may however be that the banks are a bit more careful with certain sectors than they were a couple of years ago.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please advise of any recent legal, tax, regulatory or other developments (including any reforms) that will impact foreign or domestic lenders (both bank and non-bank lenders) in the acquisition finance market in your jurisdiction.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There has not been any regulatory development in Sweden specifically targeting lending or acquisition financing for foreign or domestic lenders more recently. However, Sweden is no exception to the continuing wider trends within the development of the legal landscape for the financial industry, including with regards to, among other things, AML-related requirements and supervisory measures. Another focus point is the measures, including by the Swedish Financial Supervisory Authority, to meet the changing economic environment, including a scheduled increase of the Swedish countercyclical buffer and maintained systemic risk buffer levels, as well as other macroprudential measures that may continue to affect the competitiveness of Swedish banks. We note that the recent introduction of the European Market Infrastructure Regulation (EMIR 3.0), which is particularly relevant to participants in the Swedish derivatives market, who houses the central counterparty for, among other markets, Nasdaq Commodities, potentially adding to the current challenges of utilities to meet the margin requirements relating to their hedging positions in relation to energy prices. Considering the volumes of margin involved, depending on the reliance of the utilities on funding provided by banks in Sweden and the continued development of energy market prices and other economic and prudential uncertainties, it is conceivable that this may further negatively affect the appetite of Swedish banks to participate in other markets, such as the leveraged lending market, in a near or medium-term perspective.<\/p>\n<p>Sweden\u2019s implementation of the EU Directive on Preventive Restructuring Frameworks (EU) 2019\/1023 has resulted in significant changes as regards enforcement of security during restructuring proceedings \u2013 the main rule is now that no enforcement actions may be taken against a company that is in a business reorganisation, and the moratorium on payment of debt now also applies to secured debt.<\/p>\n<p>Further, Sweden has during recent years introduced further regulations as to screening of foreign direct investments resulting in that an acquisition by way of enforcement may require prior consent from authorities should the target conduct such business that is regulated by the relevant FDI regulations.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please highlight any specific high level issues or concerns in your jurisdiction that should be considered in respect of structuring or documenting a typical acquisition financing.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Swedish law contains rules on financial assistance which limit the ability of the target company to grant loans for the purpose of acquisition debt, and also to grant security and\/or guarantees for such acquisition debt. However, it is market practice that security and guarantees are given after a certain period of time has elapsed since the acquisition. In certain cases, the Swedish rules on financial assistance do not apply. From a practical perspective, when taking security over an account in Sweden, an important feature of Swedish law provides that the security will not be validly perfected in respect of any amount that the pledgor may dispose of, for example by way of withdrawals permitted under the terms of the financial documents.<\/p>\n<p>Another important consideration in relation to loan documentation governed by English law is that a judgment obtained in the courts of England against a Swedish company where the proceedings have been initiated after 1 July 2025 are recognised and enforceable in Sweden in accordance with and subject to the procedural steps and on the material conditions imposed by the 2019 Hague Convention on Choice of Court Agreements. The 2005 Hague Convention remains relevant only for exclusive choice of court agreements concluded after 1 January 2021 and before 1 July 2025 and for proceedings falling outside the scope of the 2019 Convention. However, for most new disputes arising in cross-border financing arrangements, the 2019 Convention will be the primary instrument governing the recognition and enforcement of English judgments in Sweden. The 2019 Hague Convention has several alternative grounds for when the Convention applies and a judgment can be recognised or enforced compared to the 2005 Hague Convention.<\/p>\n<p>In addition, in light of the recent case law of the Court of Justice of the European Union the (\u201cECJ\u201d) (reference is made to the judgment of 27 February 2025 in Societ\u00e0 Italiana Lastre SpA (SIL) v Agora SARL Case C 537\/23 ECLI:EU:C:2025:120 (the Lastre Case)) asymmetric jurisdiction clauses may be considered invalid under EU law where they are found to contravene Regulation (EU) No 1215\/2012 (the Brussels Regulation) on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, unless they satisfy specific criteria established by the ECJ in that case, to the effect that a Swedish court may not stay proceedings if there is a non-exclusive jurisdiction clause in favour of a non-EU court if those proceedings were commenced first. Although parties can include asymmetric clauses in financing documentation, these should be carefully drafted to ensure that jurisdiction is clearly limited to courts in the EU or Lugano states.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">In your jurisdiction, due to current market conditions, are there any emerging documentary features or practices or existing documentary provisions\/features which borrowers or lenders are adjusting or innovating their interpretation of, or documentary approach to?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The documentation has increasingly become more lender-friendly, with the interest coverage covenant now a common feature in loan agreements. For those entities that have experienced difficulties, a liquidity covenant has often been included. In the bond market, the number of deals with maintenance covenants (as opposed to just incurrence-based covenants) has increased.<\/p>\n<p>That being said, we understand that the banks and private debt funds are now more willing to deploy, and we therefore expect this to shift to a more borrower friendly market \u2013 at least for some sectors and for stable borrowers.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Has there been a prevalence of \u201cequity bidding\u201d in acquisition financing (i.e., signing the acquisition agreement prior to securing financing) with the expectation of securing financing shortly thereafter? If in the US, would Xerox language be included in the acquisition agreement?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Equity bidding in acquisition financing exists in the Swedish market, but it is still not as common as bidding on a certain funds-basis with pre-arranged interim loan agreements or existing acquisition facilities. However, the prevalence of equity bidding in the Swedish market seems to be increasing, particularly in auction processes for quality assets that attract strong US-based PE houses.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any notable trends in the use of certain financing structures (e.g., private credit vs syndicated vs high yield vs holdco vs mezzanine vs preferred, etc.) in your jurisdiction for acquisition financings?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Private credit continues to gain grounds.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Has the use of technology (e.g., e-signatures, digital platforms for syndication, document automation, AI, etc.) impacted the documentation or execution of acquisition financings?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Technology has impacted acquisition financings in Sweden. The use of e-signatures has increased, however, Nordic banks apply varying policies regarding the use of electronic signatures in financing transactions. The acceptance of signing with electronic signatures (most commonly requiring AES, if electronic signatures are accepted at all) varies both between banks and depending on the type of document, and one and the same bank can have different policies towards different borrowers.<\/p>\n<p>Digital platforms are also frequently employed to facilitate syndication and document sharing. We have observed an increase in the use of AI, which is being applied selectively throughout the documentation of acquisition financings.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the legal and regulatory requirements for banks and non-banks to be authorised to provide financing to, and to benefit from security provided by, entities established in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Banks in Sweden are subject to a wide variety of banking and financial services laws and regulations as well as supervision by regulatory and enforcement authorities, such as the Swedish Financial Supervisory Authority and the Swedish Resolution Authority. As with banks in other jurisdictions, Swedish financial institutions face continuously increasing regulation, which carries costs and affects their operations. Notable changes to the regulatory landscape in Sweden now and going forward include the Sustainable Finance Disclosure Regulation and the Taxonomy Regulation, the General Data Protection Regulation (GDPR), MiFID II, AML 4 and AML 5, the Insurance Distribution Directive and the Payment Services Directive 2.<\/p>\n<p>The CRD V Directive and CRR II were published in June 2019, and provide for extensive changes to the EU regulatory framework for banks and other credit institutions, including the fundamental review of the trading book, the net stable funding ratio, the minimum requirements for own funds and eligible liabilities (MREL) and the Pillar 2 framework. The CRD Directive is largely implemented by the Swedish Banking and Financing Business Act, which marks the key piece of legislation governing banking and financing operations in Sweden. In addition, the EU has adopted further updates, most notably the CRR III\/CRD VI package. CRR III applies from 2025, and CRD VI must be implemented by Member States by 2026. The Swedish Ministry of Finance (Sw. Finansinspektionen) have issued preparatory materials and regulatory updates to facilitate implementation of the CRR III and CRD VI package. The results of CRR III\/CRD VI are higher capital requirements and stricter supervision of leveraged lending, which tightens credit terms.<\/p>\n<p>Under the Banking and Financing Business Act, licensing requirements are imposed on lending entities that are financed by repayable funds from the public (e.g., in the form of deposits or transferable debt). Banks that are licensed in an EU Member State can passport the licence they have in their home country to Sweden and register to provide cross-border services or open a Swedish branch. However, a foreign company does not need a licence or to be incorporated locally solely to lend to Swedish entities (unless combined with accepting deposits from the public) or to obtain security over assets located in Sweden, including acting as a security agent on behalf of other lenders. As a result of the implementation of the European AML regime, non-licensed domestic or foreign lender (or a lender that does not rely on the aforementioned passporting regime) may be required to register with the Swedish Financial Supervisory Authority as a so-called financial institution and satisfy local KYC and other AML-related requirements. Under Swedish law, investment firms may also, subject to certain conditions, grant credit, take deposits and provide crowdfunding services. Consumer lending is subject to additional licensing and other requirements.<\/p>\n<p>Finally, a notable difference is that operating as a loan intermediary for consumer credit in Sweden as of May 2025 requires a license which were previously possible to conduct as credit institutions. This change requires credit institutions will now be required to obtain authorisation as a bank or credit market company in order to grant or intermediate consumer credit.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any laws or regulations which govern the advance of loan proceeds into, or the repayment of principal, interest or fees from, your jurisdiction in a foreign currency?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Apart from the licensing and registration requirements under Swedish law and the related passporting regime for EU-based institutions, there are no specific restrictions on such activities. Branches and subsidiaries established in Sweden and entities registered as financial institutions in Sweden are subject to Swedish AML requirements, which may increase the compliance costs of such activities. In addition, although there are no specific sanctions provisions in Swedish law, EU sanctions are enforced in Sweden, which means that lenders who are otherwise compliant will not be required to take additional measures as a result of their activities in Sweden.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any laws or regulations which limit the ability of foreign entities to acquire assets in your jurisdiction or for lenders to finance the acquisition of assets in your jurisdiction? Please include any restrictions on the use of proceeds.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Sweden&#8217;s screening regime for foreign direct investment entered into force on 1 December 2023. The screening regime requires investors to submit an application to the Swedish Inspectorate for Strategic Products and to obtain approval prior to implementing the investment. The screening regime applies to investments in legal entities established in Sweden that carry out so-called \u201cprotected activities\u201d.<\/p>\n<p>\u201cProtected activities\u201d is a broadly defined concept with several subcategories, including:<\/p>\n<p>(a) essential services, i.e. activities, services or infrastructure that maintain or ensure societal functions necessary for the basic needs, values and security of society;<\/p>\n<p>(b) security-sensitive activities, as defined in the Swedish Protective Security Act;<\/p>\n<p>(c) critical raw materials, metals and minerals;<\/p>\n<p>(d) large-scale processing of sensitive personal data or location data via a product or service;<\/p>\n<p>(e) military equipment;<\/p>\n<p>(f) dual-use items; and<\/p>\n<p>(g) new technologies and other strategically protected technologies.<\/p>\n<p>Investments are subject to prior approval if the investor will hold at least 10, 20, 30, 50, 65 or 90 per cent of the voting rights in the company after the investment. Fines of up to SEK 100 million (approx. EUR 8.8 million) may be imposed for violations of the regime, such as carrying out a transaction without prior notification.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What does the security package typically consist of in acquisition financing transactions in your jurisdiction and are there any additional security assets available to lenders?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The typical security package in an acquisition financing consists of share pledges over material companies, material intra-group loans, SPA and W&amp;I insurance, business mortgages (Sw. f\u00f6retagshypotek), and real estate mortgages (Sw. fastighetsinteckning). Typically, business mortgages and real estate mortgages are only taken as security to the extent such mortgages are already issued, as Swedish authorities levy a stamp duty on the mortgaged amount. Security may also be taken over bank accounts, which are typically left unperfected (as the perfection of pledge over bank accounts would entail limiting the pledgor\u2019s access to such accounts). If the target company operates in an IP-heavy environment, IP rights (such as trade marks and patents) may be pledged as security if such IP rights are of material value.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does the law of your jurisdiction permit (i) floating charges or any other universal security interest and (ii) security over future assets or for future obligations?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Swedish law provides for business mortgages, which are similar to a floating charge. A business mortgage covers all movable assets belonging to the company&#8217;s business, but excludes, for example, cash or bank deposits, minority shares or property that cannot be attached or otherwise included in bankruptcy proceedings. Business mortgages are considered to be a very attractive security, but they do not provide security over any specific asset, but rather they represent a right to receive a sum equal to the amount mortgaged in the event of the mortgagor\u2019s bankruptcy. The issuance of new business mortgages triggers stamp duty, which is currently one per cent. of the face value of the relevant business mortgage certificate. However, the stamp duty is a one-off cost and the mortgage certificates are permanent and can be reused by the mortgagor upon release by the mortgagee.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do security documents have to (by law) include a cap on liabilities? If so, how is this usually calculated\/agreed?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is no legal requirement that a security document must contain a cap. However, the pledgor&#8217;s ability to pledge its assets may be limited by law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the formalities for taking and perfecting security in your jurisdiction and the associated costs and timing? If these requirements are different for different asset classes, please outline the main points to note for each of these briefly.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are various types of collateral and security interests that can be provided under Swedish law, the most commonly used in financing being the pledge and the mortgage. Chattel is pledged in accordance with the principle of traditio. Put simply, for the transfer or pledge to be effective against third parties, the possession of the chattel must be transferred to the pledgee or a third party who has been notified of the pledge. Once the pledge is perfected, the pledgor must be restricted from disposing of the pledged asset in any way. If the pledgor is not restricted from such disposal, the pledge may be invalid in its entirety. Although not definitively confirmed by Swedish courts, it is generally accepted that the restriction of the pledgor\u2019s disposal of the security de jure prevents the use of so called pre-agreed release clauses (since the use of such clauses would allow the pledgor to dispose of the security asset, which in turn could invalidate the pledge). However, the prepayment of secured debt following the disposal of an asset would typically not be considered a disposal that would risk invalidating the pledge.<\/p>\n<p>Registration matters come with a minor administrative fee, but generally taking security in Sweden is not expensive. However, issuance of new business mortgage certificates or real estate mortgage certificates comes with a stamp duty (see Section 12 above).<\/p>\n<p><strong>(i) Security over shares of a company:<\/strong> If the shares are materialised: (a) the share certificates shall be endorsed in blank and delivered to the pledgee or security agent, (b) the company which shares have been pledged shall be notified of the pledge, and (c) the pledge shall be noted in the share register of the company which shares have been pledged. If the shares are dematerialised, the custodian bank shall be notified of the pledge and (depending on the type of securities account) the custodian bank will then notify the CSD.<\/p>\n<p><strong>(ii) Security over bank accounts:<\/strong> The account bank is notified of the pledge and (in the case of a perfected security), instructed to block the account.<\/p>\n<p><strong>(iii) Security over receivables \/ SPA rights \/ insurance rights:<\/strong> notification to the relevant payor is notified of the receivable and (for a perfected security) instructed to make any payments to an account not controlled by the pledgor, usually an account controlled by the pledgee or a security agent.<\/p>\n<p><strong>(iv) Security over business mortgage certificates or real estate mortgage certificates:<\/strong> If the certificates are materialised: (a) transfer of the certificates to the pledgee or security agent, and (b) notice to the authority. If the certificates are demateralised: transfer of the certificates in the computerised system to the pledgee\u2019s electronic archive.<\/p>\n<p><strong>(v) Security over most IP rights:<\/strong> Registration of the pledge with the relevant authority.<\/p>\n<p>The most common practical issue is that the issuance of share certificates requires that at least half of the board members signs the share certificates using wet ink, and as a share certificate is bearer document, the board members\u2019 signatures must be on the same physical page, which may cause some logistical problems if there is a time shortage and the various board members are to be found with a geographically separated. Delayed perfection is a potential cause for a future claw-back, and therefore share certificates are therefore generally delivered on the same day as the pledge agreement (as are other perfection measures).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any limitations, restrictions or prohibitions on downstream, upstream and cross-stream guarantees in your jurisdiction? Please also provide a brief description of any potential mitigants or solutions to these limitations, restrictions or prohibitions.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A Swedish limited liability company&#8217;s ability to pay dividends is restricted. Furthermore, a Swedish company is prohibited from providing security for another company&#8217;s debt if it is not in the company&#8217;s corporate interest or if the guarantees or security exceed what would be the company&#8217;s corporate interest, if such transactions are considered a transfer of value comparable to a dividend. In the event that a company provides a guarantee or security for a third party&#8217;s obligation, it is essential to consider whether the company stands to gain any benefit from the transaction. The question of corporate benefit is a matter for the board of directors to decide before entering into a transaction. Thus, when a company is providing a guarantee or a security for a third party\u2019s obligation, whether the company gains any benefit from the transaction must be taken into consideration. The issue of corporate benefit is a business decision, and is ultimately a question for the board of directors of the company to determine before entering into a transaction. This issue is typically mitigated by the inclusion of guarantee limitation clauses. However, the practice of using limitation language has not yet been tested in Swedish courts. Similarly, upstream and cross-stream loans, guarantees and security are also subject to restrictions. The relevant provisions are highly technical and must therefore be reviewed on a case-by-case basis.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any other notable costs, consents or restrictions associated with providing security for, or guaranteeing, acquisition financing in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Sweden, the costs associated with granting and taking security are typically minimal, with only small administrative fees required in certain cases. However, should a new mortgage certificate be required, a stamp duty will be triggered. In most instances, the taking of security in Sweden does not require the involvement of a notary, court, or authority, except for a few security interests that are perfected through registration.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is it possible for a company to give financial assistance (by entering into a guarantee, providing security in respect of acquisition debt or providing any other form of financial assistance) to another company within the group for the purpose of acquiring shares in (i) itself, (ii) a sister company and\/or (iii) a parent company? If there are restrictions on  granting financial assistance, please specify the extent to which such restrictions will affect the amount that can be guaranteed and\/or secured.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>It is not permitted for a Swedish company to provide financial assistance with the intention of acquiring shares in the company itself or in a shareholder. Such actions are prohibited by law and may result in criminal prosecution. Any individual involved in a transaction that constitutes financial assistance (including advisors) may face criminal penalties, including imprisonment, if found guilty by a court of law. However, the relevant entity may grant security and guarantees in relation to facilities and\/or tranches that do not constitute acquisition debt. Examples of such facilities include an RCF, refinancing of existing debt, or a capex facility made available for future needs.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">If there are any financial assistance issues in your jurisdiction, is there a procedure available that will have the effect of making the proposed financial assistance possible (and if so, please briefly describe the procedure and how long it will take)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Sweden does not have any &#8220;whitewash&#8221; procedures. However, Swedish legal doctrine generally views financial assistance issue as problematic when security and guarantees are granted directly in connection with closing. As a result, it is standard practice to grant security and guarantees after the lender has been exposed to a &#8220;real credit risk&#8221;. Therefore, it is customary to complete a security take-up 60\u2013120 days post-closing, upon which the target entities accede to the financing arrangements. This has however not been tried in court and limitation language is therefore included.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">If there are financial assistance issues in your jurisdiction, is it possible to give guarantees and\/or security for debt that is not pure acquisition debt (e.g. refinancing debt) and if so it is necessary or strongly desirable that the different types of debt be clearly identifiable and\/or segregated (e.g. by tranching)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>It is essential that the different types of debt are identifiable and\/or segregated, given that financial assistance is criminalised. However, as further elaborated upon above, it is possible for a Swedish target company to grant guarantees and security for debt other than acquisition debt, such as revolving and capex facilities.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does your jurisdiction recognise the concept of a security trustee or security agent for the purposes of holding security, enforcing the rights of the lenders and applying the proceeds of enforcement? If not, is there any other way in which the lenders can claim and share security without each lender individually enforcing its rights (e.g. the concept of parallel debt)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The legal concept of trust, as it is recognised under English law, does not have an equivalent under Swedish law. However, the concept of a security agent is generally used and accepted. Recently, the authority of security agents to represent bondholders in legal proceedings in Swedish courts has been called into question. In recent decisions, Swedish lower courts have decided to not allow security agents to represent the bondholders, as they have held that powers of attorney which are, pursuant to the bond terms and conditions, granted by subscribing or acquiring bonds do not fulfil the requirement of a personal signature under Swedish procedural law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does your jurisdiction have significant restrictions on the role of a security agent (e.g. if the security agent in respect of local security or assets is a foreign entity)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No, but the Swedish view is that perfection should occur in accordance with the governing laws of the jurisdiction where the assets are located. It is also worth noting that there is a debate as to whether the enforceability of a pledge over shares in a Swedish company would be negatively affected if the share certificate representing such shares were transported to a security agent residing abroad.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please provide the main differences and considerations between bank loan financing and high yield bond\/note financing for acquisition purposes in your jurisdiction, and how do they affect the structuring and documentation of the transaction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>It is certainly possible to complete and finance an acquisition by issuing a high yield bond on the Swedish market, for example between the signing and closing of the acquisition. However, such a bond issue could pose certain challenges. This is because a bond issue process by its nature involves a certain amount of publicity, such as the roadshow where the issuing company&#8217;s management presents the company&#8217;s financial status and outlook. Such public elements may create conflicts with a less public acquisition process. In addition, a bond issue on the Swedish market generally requires a high level of attention from the issuing company&#8217;s management team, which can cause timing issues and may negatively affect both the acquisition timetable and the bond issue process. Also, board members may be held liable should the marketing material not be correct, and it is therefore a risk for the board of a bidco to describe the target group business in such material, when it may not yet have acquired full knowledge of the business.<\/p>\n<p>As a consequence, it is more common for the acquirer to arrange a bridge to bond facility, typically with a one-year tenor. Later, once the acquisition has been completed, the target&#8217;s management, often together with the buyer&#8217;s management team, is able to focus on the bond issue process.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Describe the loan transfer mechanisms that exist in your jurisdiction and how the benefit of the associated security package can be transferred.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>From a Swedish legal standpoint, the loan and the associated security package must be transferred jointly. In order for a security to be valid, there must be a debt (or a potential future debt). In accordance with Swedish law, the transfer of debt is conducted through an assignment of rights, benefits and obligations. In the event of a bilateral agreement, the debtor must be duly informed of the transaction. Conversely, in the case of a syndicated or club deal, the agent must be notified in order to obtain in rem rights for the transfer. Transfers by novation should be avoided.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the rules governing the priority of competing security interests in your jurisdiction? What methods of subordination are used in your jurisdiction and can the priority be contractually varied? Will contractual subordination provisions survive the insolvency of a borrower incorporated in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>It is standard practice in the Swedish leveraged finance market for lenders to enter into intercreditor agreements to contractually govern the priority of competing security interests. Such agreements may be entered into between debt funds and a super senior RCF lender, or between junior lenders and senior lenders. In certain instances, senior lenders may elect to even forego structural seniority, instead solely relying on intercreditor agreements to ensure their priority. In essence, the parties involved are at contractual liberty to agree that one party will receive payment after the others have been fully compensated. However, Swedish legal doctrine suggests that a bankruptcy administrator would not be obliged to observe such agreements. Furthermore, it is unclear how such contractual priority would hold up in court proceedings between the bankruptcy estate and the creditors. Instead, creditors with contractual priority would have to rely on the turnover provisions of such intercreditor agreement, rather than the general priority in cases of bankruptcy of the debtor.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a concept of \u201cequitable subordination\u201d in your jurisdiction whereby loans provided by a shareholder (as a creditor) to a company incorporated in your jurisdiction are subordinated by law upon insolvency of that company in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Debentures (Sw. f\u00f6rlagsl\u00e5n) can be used to provide a subordinated loan to a company, with the relevant lender declaring that the loan will be subordinated to all unsubordinated lenders. This results in the lender to the debenture only ranking ahead of equity, and therefore being deeply subordinated. This contractual subordination has been a widely used instrument, particularly by banks in the context of their capital instrument issuances. Following the implementation of Article 48(7) of the BRRD (Directive 2014\/59\/EU) in June 2021, the insolvency ranking of capital instruments (such as additional tier 1 and tier 2 instruments) will track their recognition as regulated capital. The implementation in Sweden of the Creditor Hierarchy Directive (Directive (EU) 2017\/2399) introduced a new asset class of &#8220;non-preferred&#8221; senior debt (ranking below ordinary unsecured claims). Furthermore, insured deposits and preferred deposits (held by, most notably, natural persons and SMEs) are afforded preferential treatment.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does your jurisdiction generally (i) recognise and enforce clauses regarding choice of a foreign law as the governing law of the contract, the submission to a foreign jurisdiction and a waiver of immunity and (ii) enforce foreign judgments?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In general, Swedish courts will recognise and apply a foreign choice of law clause unless it would be contrary to Swedish public policy or mandatory Swedish law to do so. It is advisable to perfect the security in accordance with Swedish law, in addition to the chosen foreign law, if assets located in Sweden are to be used as security. This is because Swedish international private law rules stipulate that Swedish law applies to in rem rights over assets located in Sweden. A security interest created under a non-Swedish law security document may be recognised by Swedish courts, provided that it is valid under the law of the security document. However, the enforceability of the security interest in Sweden is subject to the condition that the necessary actions have been taken under Swedish law to create and perfect the relevant form of security.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the requirements, procedures, methods and restrictions relating to the enforcement of collateral by secured lenders in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The specific type of security in question will determine the applicable requirements, procedures and restrictions. However, it is essential to understand that a notice of an event of default, which declares the debt immediately due and payable, will always be required, save for in exceptional cases, before the enforcement of the security. In the event of enforcement, the security agent is bound by the duty of care (Sw. v\u00e5rdplikt), in addition to the terms set out in the relevant pledge agreement. It should be noted that the duty of care will take precedence over the terms of the pledge agreement. Despite having been granted written permission to take certain actions, the security agent is still obliged to question the provisions of the pledge agreement on the basis of their duty of care. In the event of security being enforced, any surplus funds must be remitted to the security provider. It is only possible to enforce business and real estate mortgages through the Swedish Enforcement Authority. Other assets can be sold by the security agent, preferably through a public auction, as this is the most effective method of demonstrating that the security was sold at market value. It is often advisable to engage the services of a reputable third party, with experience in similar valuation assignments, to provide a valuation of the assets. In the event of bankruptcy, the assets will not be enforceable without consultation with the administrator. In certain circumstances, the administrator may postpone enforcement if they believe the assets are required by the bankruptcy estate. Nevertheless, the administrator will typically assist with the sale of assets upon request, and this is usually the case as the administrator is free to use all methods for selling the asset while the pledgee must sell the assets by way of an auction.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the insolvency or other rescue\/reorganisation procedures in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The two main insolvency procedures are bankruptcy, and company reorganisation for companies seeking to avoid bankruptcy. Company reorganisation provides a company with protection from bankruptcy and a grace period for payment of debts incurred before the company reorganisation began. The most commonly sought outcome of company reorganisations is to get a majority of creditors to accept a write-down of debts without the consent of all creditors. From 1 August 2022, a company reorganisation may also protect the company from the enforcement of security by a secured creditor, as the law now provides that the consent of the administrator is required for a secured creditor to be entitled to enforce. Bankruptcy is a procedure which aims to wind up the affairs of a company and, after the sale of all its assets, to distribute the available funds fairly among its creditors. An administrator is appointed by the court at the start of the bankruptcy and will make all decisions thereafter &#8211; which may include a decision to continue some or all of the business if such action would maximise the value of the bankruptcy estate.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does entry into any insolvency or other process in your jurisdiction prevent or delay secured lenders from accelerating their loans or enforcing their security in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The new Swedish Company Reorganisation Act (2022:964) came into force on 1 August 2022. It includes provisions that limit the possibility of enforcing security during a company reorganisation. In such cases, the consent of the administrator will always be required.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">In what order are creditors paid on an insolvency in your jurisdiction and are there any creditors that will take priority to secured creditors?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In accordance with Swedish legislation, a statutory order of priority is established for claims, as follows (shortened):<\/p>\n<ul>\n<li>claims against the bankruptcy estate, including fees and costs incurred by the bankruptcy administrator, as well as expenses accumulated by the estate throughout the bankruptcy proceedings, such as Value Added Tax claims or claims from third parties based on agreements with the bankruptcy administrator;<\/li>\n<li>claims with specific priority, including pledges over shares in subsidiaries, trademarks, patents and, subsequently, business and real property mortgages;<\/li>\n<li>claims with general priority, including certain employees&#8217; claims for wages and other compensation, as well as certain accounting costs; and<\/li>\n<li>claims without priority, which normally rank equally and will be satisfied proportionately.<\/li>\n<\/ul>\n<p>The recently enacted Swedish Company Reorganisation Act introduces a new concept regarding the ranking of financial claims in the event of a company&#8217;s insolvency. Specifically, rescue financing provided for the purpose of supporting a company undergoing a company reorganisation will rank before business mortgages (but after pledges granted over specific assets) in the event of the company&#8217;s insolvency.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any hardening periods or transactions voidable upon insolvency in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A three-month hardening period will apply in most cases. However, in certain instances, the hardening period may be extended.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any other notable risks or concerns for secured lenders in enforcing their rights under a loan or collateral agreement (whether in an insolvency or restructuring context or otherwise)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In certain cases, the pledgor may believe that the security agent has sold the assets at an undervalue. Consequently, there is always a possibility of encountering a dispute as a result of the enforcement process. The risk is mitigated if the enforcement is conducted during a bankruptcy, as there is a presumption that the administrator will only have agreed to the enforcement if it does not damage the bankruptcy estate. Due to the inherent risks associated with enforcement, it is essential to structure enforcements carefully and to strive to maximise the value obtained. Ideally, the value should also be supported by third-party valuations.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please detail any taxes, duties, charges or related considerations which are relevant for lenders making loans to (or taking security and guarantees from) entities in your jurisdiction in the context of acquisition finance, including if any withholding tax is applicable on payments (interest and fees) to lenders and at what rate.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Sweden does not impose withholding tax on interest payments.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any other tax issues that foreign lenders should be aware of when lending into your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>From the perspective of the borrower group, the two central tax considerations are arguably profit repatriation and servicing of debt by the target group, along with the rules concerning tax consolidation. These must be analysed in detail in each specific case.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the regulatory framework by which an acquisition of a public company in your jurisdiction is effected?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The main body of rules governing public offers in Sweden are the Act on Public Takeovers, which is based on the European Union\u2019s Directive on Takeover Bids (2004\/25\/EC), and the self-regulatory takeover rules issued by the Swedish Corporate Governance Board (jointly the \u201cTakeover Rules\u201d).<\/p>\n<p>The regulatory framework differs somewhat between regulated markets, such as Nasdaq Stockholm and NGM Main Regulated Equity, and multilateral trading facilities (MTFs), such as Nasdaq First North Growth Market, Nordic SME and Spotlight Stock Market, where the latter is not subject to the Act on Public Takeovers. Different types of public offers may also trigger certain additional and\/or different rules, the most common types being mandatory offers (i.e., when a bidder obtains 30% or more of the votes in the target) or management buyouts (i.e., if a board member or senior executive of the target makes or participates in the public offer or if the bidder is a parent company).<\/p>\n<p>In addition to the Takeover Rules, the Swedish Companies Act, Swedish securities legislation (e.g., with respect to disclosure requirements of substantial holdings, insider dealing and reporting requirements to the Swedish Financial Supervisory Authority (the \u201cSFSA\u201d)), and statements by the Swedish Securities Council, a self-regulatory body, perform an accessory role in regulating takeover matters.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the key milestones in the timetable (e.g. announcement, posting of documentation, meetings, court hearings, effective dates, provision of consideration, withdrawal conditions)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>As an initial key milestone in a takeover process, the bidder often wants to interact with the target for the purpose of a due diligence review and seeking a recommendation from the target board to be made public when launching the offer. The initial formal contact with the target is typically made by sending a non-binding indication of interest letter, so-called offer letter, to the target board. Additionally, during this confidential and preparatory phase of the public offer, a bidder also secures financing of the offer (as described further below) and often strives to secure irrevocable undertakings to accept the offer from major shareholders of the target.<br \/>\nThe public announcement of the offer, which is formally made through a press release, constitutes the next key milestone. At the announcement of the offer, all preparations, such as the due diligence review and the securing of \u201ccertain funds\u201d (as described further below), should be complete.<\/p>\n<p>Following the announcement of the offer, a formal offer document is prepared by the bidder, normally in co-operation with the target. The offer document should be filed with the SFSA within four weeks from the offer announcement and contain all relevant information pertaining to the public offer. The information requirements for the offer document are regulated by the Financial Instruments Trading Act and the Takeover Rules.<\/p>\n<p>After having published the offer document, the acceptance period for the public offer can commence. The acceptance period of the offer must be at least three weeks (in management buyouts, four weeks) and initially not more than ten weeks. An extension of the acceptance period may be made, either where the bidder has reserved such a right or where payment to those who have accepted the offer is not delayed as a result of such extension.<\/p>\n<p>At the end of the acceptance period, the bidder must as soon as possible disclose the outcome of the offer, including whether the conditions for completion of the offer have been met. This is normally done within approximately up to three business days. In connection with this, the offer is either declared unconditional and completed or withdrawn. If the offer is completed, delivery of consideration for the shares (settlement) is normally effected within 5\u20137 business days thereafter.<\/p>\n<p>In connection with the offer being accepted by shareholders to such extent that the bidder holds more than 90% of the shares in the target, a squeeze-out procedure regarding any remaining minority shares may be initiated, constituting the final key milestone in the public offer process. Simultaneously, the bidder normally will ask the target\u2019s board to give notice to an extraordinary general meeting to elect new board members and submit an application for de-listing of the target shares from the relevant trading venue where the shares are listed.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the technical minimum acceptance condition required by the regulatory framework? Is there a squeeze out procedure for minority hold outs?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Any condition of minimum acceptance level in a public offer is made at the discretion of the bidder and there is no minimum acceptance condition required by the regulatory framework. However, the most common acceptance level condition is that the bidder becomes the owner of more than 90% of all shares in the target since this enables the bidder to initiate a squeeze-out procedure to compulsory purchase the remaining shares in the target and de-list the target. The squeeze-out procedure is governed by the Swedish Companies Act.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">At what level of acceptance can the bidder (i) pass special resolutions, (ii) de-list the target, (iii) effect any squeeze out, and (iv) cause target to grant upstream guarantees and security in respect of the acquisition financing?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Swedish law, a bidder will be able to direct the outcome of resolutions such as amendments to the target\u2019s articles of associations, issue securities without regard to the pre-emptive rights of target shareholders and reduce the share capital, at an acceptance level resulting in an ownership for the bidder of two-thirds (66 2\/3%) of the shares and votes in the target, as these resolutions require a two-third majority of the votes cast and shares represented at the shareholders\u2019 meeting. At an acceptance level resulting in an ownership for the bidder of more than 50% of the votes, the bidder will be able to direct the outcome of resolutions to elect board members, as the board candidates who receive most votes at the shareholders\u2019 meeting are elected, and resolutions to allocate the company\u2019s profits and losses, as such resolutions require more than 50% of the votes cast at the shareholders\u2019 meeting.<\/p>\n<p>At an ownership level of more than 90% of the shares, the bidder can initiate a de-listing process of the target shares without contravening good stock market practice and initiate a squeeze-out procedure, as described above.<br \/>\nWith an ownership of more than 50%, the financial assistance group company exemption under the Swedish Companies Act is applicable, enabling loans from the target (i.e., the subsidiary) to be made to the bidder (i.e., the parent company).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a requirement for a cash confirmation and how is this provided, by who, and when?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Takeover Rules explicitly state that an offer should be made only when the bidder has every reason to believe that the bidder is able and will continue to be able to implement and complete the offer. This includes also being able to pay the cash consideration for the target shares, meaning that the bidder must have secured the cash financing for the offer by way of binding and fundable debt and\/or equity financing arrangements on a \u201ccertain funds\u201d basis as from the public announcement of the offer, to the extent that the bidder does not have own available cash funds. There is no requirement of a cash confirmation from an external party. However, the Takeover Rules stipulate that the bidder\u2019s advisors have the responsibility to make themselves comfortable that the bidder has the financial resources available as set out above.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What conditions to completion are permitted?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The completion of the offer may be made subject to conditions, which entitle the bidder to withdraw the offer in case one or several of the conditions are not met. Such conditions must be included in the press release announcing the offer and in the offer document. The conditions must be described in detail and must be objectively verifiable, i.e., they cannot depend on subjective judgements by the bidder, and the fulfilment of the condition may not be within the bidder\u2019s control. The philosophy underlying these requirements is that the target shareholders should be able to assess the prerequisites for completion of the offer.<\/p>\n<p>The bidder may make the completion of the offer conditional on a lender disbursing the acquisition loan. However, such a condition gives the bidder the possibility not to complete the offer only if the lender, in breach of the loan agreement, fails to disburse the loan (e.g., due to the lender\u2019s insolvency or breach of contract). Conditions for payment of the loan under the loan agreement may not be invoked by the bidder as grounds for not completing the offer. To be invoked as grounds for not completing the offer, such conditions must be set out as conditions for completion of the offer and meet the requirements set out above. For these and for commercial reasons, conditions for completion of the offer relating to the disbursement of the loan financing are uncommon.<\/p>\n<p>Common conditions for completion of the offer include:<\/p>\n<ul>\n<li>the bidder becoming the owner of a certain level, usually more than 90%, of the shares in the target;<\/li>\n<li>the passing of necessary shareholder resolutions by the bidder (typically relevant only in exchange offers);<\/li>\n<li>the bidder obtaining necessary regulatory approvals;<\/li>\n<li>the target not taking any defence measures;<\/li>\n<li>the absence of force majeure (limited in scope);<\/li>\n<li>no undisclosed material information and no misleading information having been publicly disclosed; and<\/li>\n<li>the absence of any material adverse change with respect to the target.<\/li>\n<\/ul>\n<p>The bidder normally also retains the discretionary right to waive any of the above conditions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">8456<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/124206","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=124206"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}