Module 2 · Chapter 5

Representations, Undertakings and the Paper Trail

Before any trade, each side states facts the other may rely on and promises to keep sending papers. One letter from the lenders under the loan had to exist before the bank would sign.

≈ 14 min read 8-question test

In this chapter

  • What each side states as true, and why it states it again on every trade
  • What each side promises to send, and the one item that ends with the loan
  • Why the lenders' consent letter had to come before signing

5.1Representations and undertakings in one paragraph

Before two parties trade under a master agreement, each states certain facts to the other. These statements are representations, and they sit in clause 3. Each side also makes promises that last as long as the agreement. These are undertakings, in clause 4.

Part 3 of the Schedule lists the documents to be sent, and Part 2 holds the tax statements. Little of this was argued over. The hard point was a letter from the lenders under Atlas's loan, which had to exist before the bank would sign.

Key point

The representations are made on signing and again on every Trade Date. A statement that was true on signing can be false on the day of a trade.

Also in this chapter

  1. What each side states, and when
  2. Why the bank says it gives no advice
  3. Why lawyers check that the other side can sign
  4. What each side promises to do
  5. The documents Atlas must send
  6. Why the loan had to allow the swap
  7. What the consent letter says
  8. The tax statements
  9. Your job

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