{"id":123854,"date":"2026-01-05T11:45:09","date_gmt":"2026-01-05T11:45:09","guid":{"rendered":"https:\/\/legal500.designextreme.com\/guides\/?post_type=comparative_guide&#038;p=123854"},"modified":"2026-01-05T11:45:09","modified_gmt":"2026-01-05T11:45:09","slug":"new-zealand-private-equity","status":"publish","type":"comparative_guide","link":"https:\/\/legal500.designextreme.com\/guides\/chapter\/new-zealand-private-equity\/","title":{"rendered":"New Zealand: Private Equity"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-123854","comparative_guide","type-comparative_guide","status-publish","hentry","guides-private-equity","jurisdictions-new-zealand"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Simpson Grierson<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/legal500.designextreme.com\/guides\/wp-content\/uploads\/2019\/07\/simpson-grierson.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Simpson Grierson<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/legal500.designextreme.com\/guides\/wp-content\/uploads\/2019\/07\/simpson-grierson.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Private Equity laws and regulations applicable in New Zealand<\/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 proportion of transactions have involved a financial sponsor as a buyer or seller in the jurisdiction over the last 24 months?<\/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>Over the past two years, approximately 23% of all M&amp;A transactions in New Zealand involved a financial sponsor, marking a slight increase from the previous two-year period, when the figure stood at around 19%.<\/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 main differences in M&A transaction terms between acquiring a business from a trade seller and financial sponsor backed 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>There are some notable differences in M&amp;A terms when acquiring from a trade seller versus a financial sponsor in New Zealand:<\/p>\n<p><strong>Warranties:<\/strong> Financial sponsors generally require that warranties (beyond title and capacity) be given on a \u2018no recourse\u2019 basis, while facilitating due diligence to enable the buyer to obtain W&amp;I insurance in respect of the warranty suite. While some trade sellers adopt this approach, it is more common for trade sellers to stand behind a full suite of warranties themselves.<\/p>\n<p><strong>Pricing:<\/strong> Financial sponsors often favour a \u201clocked-box\u201d pricing mechanism, which avoids post-completion purchase price adjustments and the risk of having to return funds to the buyer. They also typically resist purchase price mechanics that would delay the distribution of sale proceeds to investors, such as escrows and earn-outs.<\/p>\n<p><strong>Restraints:<\/strong> Financial sponsors typically resist broad restrictive covenants, whereas trade sellers are generally expected to provide more comprehensive restraints.<\/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\">On an acquisition of shares, what is the process for effecting the transfer of the shares and are transfer taxes payable?<\/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 signed share transfer form is required from the transferor (seller) and, in some cases, the transferee (buyer). If the transferee assumes liability (eg unpaid amounts on shares), their signature is mandatory.<\/p>\n<p>The signed form must be delivered to the target company who then enters the transferee\u2019s name in the share register, completing the legal transfer. The share register is prima facie evidence of title, and the company must update shareholder details with the New Zealand Companies Office within 10 working days of the transfer.<\/p>\n<p>The target company\u2019s constitution or shareholders\u2019 agreement may impose additional requirements for the transfer.<\/p>\n<p>New Zealand does not impose stamp duty or any specific share transfer tax. New Zealand does not have a comprehensive capital gains tax, but gains may be taxable if shares were acquired with the dominant purpose of resale, as part of profit-making scheme, or if the seller is in the business of share dealing. Goods and services tax (GST) generally does not apply to the sale of shares.<\/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\">How do financial sponsors provide comfort to sellers where the purchasing entity is a special purpose vehicle?<\/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>Financial sponsors typically provide comfort to sellers by issuing an equity commitment letter, under which the relevant fund \/ funding entity undertakes to provide sufficient funds to cover the equity component of the purchase price to the SPV purchaser. In addition, sponsors generally provide evidence of committed debt financing to demonstrate that the debt portion of the purchase price is fully secured.<\/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\">How prevalent is the use of locked box pricing mechanisms in your jurisdiction and in what circumstances are these ordinarily seen?<\/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>Locked box pricing mechanisms are increasingly common in New Zealand (seen in approximately one-quarter of private M&amp;A transactions). They are most often used in private equity exits.<\/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 typical methods and constructs of how risk is allocated between a buyer and seller?<\/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 New Zealand transactions, risk allocation between a vendor and purchaser is typically achieved through warranties, disclosures, indemnities, and price-adjustment mechanisms.<\/p>\n<p>Warranties will commonly provide coverage for the business, including key areas of the business, its accounts, and the quality and completeness of due diligence information. A seller\u2019s liability for those warranties will generally be limited by:<\/p>\n<ul>\n<li>any items \u201cfairly disclosed\u201d, typically by reference to the entire contents of the data room;<\/li>\n<li>minimum claims thresholds (a de-minimis in the range of 0.05% \u2013 0.1% and a basket in the range of 0.5% \u2013 1%);<\/li>\n<li>maximum claims limits (variable); and<\/li>\n<li>time limitations (12-24 months for business warranties, and up to 6 or 7 years for fundamental warranties and tax).<\/li>\n<\/ul>\n<p>Indemnities are used to allocate risk for higher-risk or identified issues, given they typically apply notwithstanding disclosure.<\/p>\n<p>Economic risk is allocated through completion accounts, locked-box structures, and\/or earn-outs.<\/p>\n<p>Conditions precedent allocate the risk of required future events (such as regulatory consents or key third-party approvals), while limitation of liability caps, thresholds, time limits, and exclusions contain the vendor\u2019s exposure.<\/p>\n<p>Additional tools include escrow or retention arrangements, restrictive covenants, transitional services, and, commonly (especially where financial buyers are involved), W&amp;I insurance. Overall, risk allocation in NZ is guided by commercial negotiation, with the contract determining which party bears responsibility for pre- and post-completion risks.<\/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\">How prevalent is the use of W&I insurance in your transactions?<\/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>W&amp;I insurance has become increasingly prevalent in New Zealand M&amp;A transactions in the last decade, particularly for mid-to-high value deals and those involving private equity exits, management rollover, or competitive auction processes.<\/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\">How active have financial sponsors been in acquiring publicly listed companies?<\/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 only a limited number of takeovers and schemes of publicly listed companies in New Zealand, typically fewer than 10 annually. The statistics vary significantly but suggest that financial sponsors will complete one or two transactions of this nature in any year.<\/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\">Outside of anti-trust and heavily regulated sectors, are there any foreign investment controls or other governmental consents which are typically required to be made by financial sponsors?<\/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>New Zealand has a comprehensive foreign direct investment regulation framework, established under the Overseas Investment Act 2005 (OIA), which regulates investments by \u201coverseas persons\u201d in certain New Zealand assets through a specialist regulator known as the Overseas Investment Office (OIO). If consent is required under the OIA, an application must be made to the OIO and consent must be granted before the investment can proceed. There are three main investment pathways under the regime: significant business assets, sensitive land and fishing quotas. \u201cSensitive land\u201d includes residential, forestry and farmland.<\/p>\n<p>The OIO assesses applicants based on character and capability requirements (Investor Test). Certain investment pathways also require the submission of an investment plan to demonstrate benefits to New Zealand (Benefits to New Zealand Test). In addition, depending on the ultimate ownership\/control of the investor or the nature of the asset being acquired, certain investments may be subject to the national interest assessment (National Interest Test) overseen by the Minister of Finance.<\/p>\n<p>Any investment by an overseas person in a \u201cstrategically important business\u201d that does not otherwise require OIO consent, may be subject to the national security and public order \u201ccall-in\u201d regime, in which case the investment could be \u201ccalled-in\u201d for review by the relevant Government minister or be compulsorily or voluntarily notified to the OIO.<\/p>\n<p>Legislation is currently being enacted to amend the OIA, which amendments are expected to come into force in the first quarter of 2026. The amendments to the OIA:<\/p>\n<p>(a) will consolidate the Investor Test, the Benefits to New Zealand Test, and the National Interest Test into a single test; and<\/p>\n<p>(b) aim to have most applications processed within 15 working days (noting that this expedited process will not apply to farm or residential land).<\/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\">How is the risk of merger clearance normally dealt with where a financial sponsor is the acquirer?<\/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>Merger clearance in New Zealand is not mandatory. There is a legislative prohibition on the acquisition of shares or assets where the effect, or likely effect, is a substantial lessening of competition in a market in New Zealand. This requires an assessment of the competition implications of a transaction by reference to the relevant markets to determine whether there is a substantial anticompetitive effect.<\/p>\n<p>Consolidation can be through the acquisition of a direct competitor or another operator in the industry. The outcome of the competition analysis will inform whether an approach to the competition regulator (the New Zealand Commerce Commission (Commission)) for clearance or authorisation should be sought. Notwithstanding that New Zealand is not subject to mandatory merger control, the Commission will initiate its own assessment of a potential acquisition if it becomes aware of a transaction, for example through publicly available information, and it considers that there are aspects to consider from a competition perspective.<\/p>\n<p>In 2026, reforms are expected to be introduced to New Zealand\u2019s competition legislation, broadening the scope of the merger prohibition to allow the Commission to assess the cumulative effects of all the acquirer\u2019s acquisitions in the preceding three years. This is intended to target \u201ccreeping acquisitions\u201d of multiple small companies in a certain timeframe. The Commission will also gain the ability to accept behavioural undertakings from proposed purchasers, in addition to divestment undertakings which the Commission can already accept.<\/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\">Have you seen an increase in (A) the number of minority investments undertaken by financial sponsors and are they typically structured as equity investments with certain minority protections or as debt-like investments with rights to participate in the equity upside; and (B) \u2018continuation fund\u2019 transactions where a financial sponsor divests one or more portfolio companies to funds managed by the same sponsor?<\/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>Over time, as financial sponsors have sought to distinguish themselves, or have struggled to find deal flow, minority investments have become more common although they are not usually seen as desirable for typical buy-out funds. Limited partners seeking to expand their investment portfolios without control roles have become increasingly active in this space especially via co-investment.<\/p>\n<p>Negative control via board and shareholder veto rights are more critical on minority investments and a significant issue is the sponsor\u2019s right to exit (and to control the exit of other shareholders) given it is typically necessary to drag other shareholders to secure a control premium. The right to such assets is typically fact specific, but in these situations, sponsors are often subject to longer than typical notice periods, pre-emptive mechanics and consultation rights. In some cases, the sponsor may be required to pursue liquidity for the minority stake only (but with support from the company and other shareholders).<\/p>\n<p>Continuation vehicle exits have been rare in NZ and, where they have been used, are often portfolio companies of offshore sponsors. Some major NZ sponsors have more flexible mandates which may result in \u201clonger holds\u201d reducing the pressure to use a continuation vehicle. Given offshore trends, it is only a matter of time before these become more common in New Zealand.<\/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\">How are management incentive schemes typically structured?<\/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>Management incentive schemes in New Zealand are typically structured through share option schemes (ESOPs) or \u201cphantom\u201d schemes. Historically, borrow and buy schemes were popular due to preferential tax treatment, under which shares were acquired upfront at market value (typically using a loan from the issuer) and held in trust for participants pending satisfaction of vesting conditions. Legislative changes in 2018 shifted the taxing point to vesting, based on share value at that time, removing previous tax advantages. As a result, option schemes have become a common structure, offering simplicity and international recognition. Phantom share schemes are also used, providing economic exposure or cash bonuses without direct share ownership. The management equity pool generally ranges from 5-10% of share capital.<\/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 specific tax rules which commonly feature in the structuring of management's incentive schemes?<\/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>New Zealand\u2019s employee share scheme (ESS) tax rules generally seek to tax ESS benefits in the same manner as other forms of employment income, with a limited exemption for certain schemes made widely available to employees (which are uncommon in practice). This means there is limited ability to structure the terms of an ESS in a way that delivers a New Zealand tax benefit for management.<\/p>\n<p>As a result, employee share option plans are the most common form of ESS in New Zealand for private and non-listed companies (with income tax triggered at exercise on the difference between the exercise price and the market value of the shares at that time).<\/p>\n<p>\u2018Loan-funded\u2019 schemes are also common, under which employees pay market value for shares upfront using a loan from their employer. A potential tax benefit of a loan-funded scheme is that any uplift in share value may not be taxed under the ESS rules, but only where the loan is full recourse and the employee acquires the shares on the same terms as other shareholders (with no real risk that the shares will be forfeited and no downside protection). The loan can be interest free, noting there is an exemption from fringe benefit tax for loans provided in relation to an ESS where certain requirements are satisfied.<\/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 senior managers subject to non-competes and if so what is the general duration?<\/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 New Zealand, senior managers can be subject to non-compete clauses, but these must be reasonable in scope, duration, and geographic area to be enforceable. In the context of private equity, senior managers are generally subject to non-compete clauses to protect the value of the portfolio company and its competitive edge. These clauses typically last between 6 to 12 months and aim to safeguard sensitive information, key relationships, and intellectual property that are critical to the business&#8217;s value post-investment. Courts are cautious about enforcing overly restrictive clauses and may modify or strike them down if they limit an individual\u2019s ability to work.<\/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\">How does a financial sponsor typically ensure it has control over material business decisions made by the portfolio company and what are the typical documents used to regulate the governance of the portfolio company?<\/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>Financial sponsors typically maintain control over material business decisions through governance arrangements that provide:<\/p>\n<p>(a) control of the portfolio company\u2019s board of directors;<\/p>\n<p>(b) the right to appoint, remove and replace senior management; and<\/p>\n<p>(c) veto rights over significant matters such as mergers and acquisitions, changes to capital structure, business plan amendments, and dividend or leverage policies.<\/p>\n<p>These governance rights are commonly documented in a shareholders\u2019 agreement, the company\u2019s constitutional documents, management employment agreements, and detailed delegations of authority to management.<\/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 common to use management pooling vehicles where there are a large number of employee shareholders?<\/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>Pooling vehicles are commonly used in New Zealand where there is a large number of employee shareholders. Typical structures include employee share trusts or special purpose vehicles. These vehicles consolidate legal ownership under a single entity while employees retain beneficial interests, reducing administrative complexity. They facilitate corporate actions such as voting, dividend distribution, exit processes and simplify compliance with applicable regulations. These arrangements can also accommodate vesting schedules, leaver provisions and tax considerations, making them a practical solution for managing employee ownership.<\/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 most commonly used debt finance capital structures across small, medium and large 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>The New Zealand debt market is heavily influenced by the four major banks and their efforts to maintain relationships throughout the market. As a result, the most common debt financing structures are secured bilateral and syndicated loans. Underwriting and arranging is only usually observed in larger transactions and in syndicated structures it is common for one of the major banks to take a leading role. These arrangements attract a commonly adopted pair of leverage and interest cover covenants.<\/p>\n<p>Private capital, which has long been prevalent in the real estate financing sector, is starting to have some impact on leveraged financing which, in part, has been driven by more sophisticated borrowers looking for alternatives to the established bank market.<\/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 financial assistance legislation applicable to debt financing arrangements? If so, how is that normally dealt with?<\/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 provision of financial assistance is addressed under the Companies Act 1993 and the relevant provisions capture the provision of a loan, guarantee or security.<\/p>\n<p>There are two avenues to authorise financial assistance which can both be completed at the time of acquisition meaning the relevant transaction can be structured so that there is minimal delay in the provision of the financial assistance.<\/p>\n<p>The simplest, and most commonly adopted, procedure is undertaken in accordance with section 107 of the Companies Act 1993 and requires<\/p>\n<p>(a) all \u2018entitled persons\u2019 (being the shareholders and any other person who has the same rights as a shareholder in accordance with the constitution (of whom there are usually none)) to approve the provision of financial assistance; and<\/p>\n<p>(b) the board to resolve that the company will satisfy the solvency test following the provision of financial assistance.<\/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\">For a typical financing, is there a standard form of credit agreement used which is then negotiated and typically how material is the level of negotiation?<\/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>Each major bank has its own form of standardised documentation which are regularly adopted and accepted for smaller transactions.<\/p>\n<p>At the other end of the scale the Asia-Pacific Loan Market Association (APLMA) Australia branch form of facility agreement is becoming the most adopted form of agreement for large bilateral and syndicated transactions.<\/p>\n<p>For transactions that sit between those positions, the approach on documentation and whether bank standard forms or the market APLMA form are adopted will be determined in the context of the transactions\u2019 particular merits and the intentions of the relevant bank involved, the borrower and\/or the sponsor.<\/p>\n<p>Negotiation of bank form documentation is usually only focussed on key commercial matters and the level of negotiation of the market APLMA for will be determined by a range of factors. Those factors include the economic profile of the transaction, the identity of the borrower and\/or sponsor, the security on offer, whether the obligor group includes entities from different markets and whether there is any precedent between the parties or being pushed by the borrower\/sponsor.<\/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 have been the key areas of negotiation between borrowers and lenders in the last two years?<\/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>Given the size of the New Zealand market, trends in other markets have a high degree of influence in negotiation of documentation and the participation of offshore borrowers (and\/or sponsors) and lenders (in both bilateral and syndicated arrangements) drives the adoption of those trends.<\/p>\n<p>In addition to the usual focus on the parameters for financial covenants, over the past two years there has been increasing focus on protecting against liability management exercises, ensuring the relevant amendment\/consent regime is appropriate, granting the necessary power to relevant finance parties to enable them to allow for administrative matters to be addressed without needing specific consent and providing for the transfer of a portfolio entity to a continuation vehicle.<\/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\">Have you seen an increase or use of private equity credit funds as sources of debt capital?<\/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 for real estate based financing is a well-established alternative bank capital. With increasing construction costs and reduced margins, this market has broadened the access to capital for many participants.<\/p>\n<p>Private credit more generally has not yet had a substantial impact on corporate and leverage lending as the major banks have continued to participate and are happy to compete with the private credit funds.<\/p>\n<p>Local credit funds are currently seeing an influx of investment due to the reconfigured investor plus visa programme which has a lower threshold for investment into private credit. As those funds are deployed, we anticipate the influence of private credit will grow.<\/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\">3303<\/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:\/\/legal500.designextreme.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/123854","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/legal500.designextreme.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/legal500.designextreme.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/legal500.designextreme.com\/guides\/wp-json\/wp\/v2\/media?parent=123854"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}