In its May monthly update, the Loan Market Association (LMA) issued a statement on debt buy-backs. The LMA says that it considers the decision to allow a borrower to buy back its debt to be primarily a commercial one, to be agreed by the borrower and its lenders on a case-by-case basis. If it is allowed, the buy-back should be carried out in such a way as to maintain the fundamental principle of syndicated lending that the borrower should treat the lenders equally and that all the terms and conditions of individual loan agreements are upheld.

The LMA says that it will be altering its primary facility agreements to permit borrowers and lenders to determine whether debt buy-backs should be allowed.

For more on debt buy-backs, see Legal update, Debt buy-backs.