20 March 2020
The COVID-19 epidemic may pose a challenge for existing relationships between parties to transactions for financing in the form of facilities and bonds.
In Poland, as at the date of this briefing (16 March 2020) there are no known cases of notice to terminate or modify facility agreements or present bonds for immediate redemption because of the threat of the epidemic. However, in the current situation there are reasonable concerns about maintaining the liquidity and creditworthiness of borrowers/issuers in certain sectors, which is a result of the general situation and the legal measures the government is taking in connection with the threat. Consequently, both banks and state institutions have made announcements of support for borrowers affected by the consequences of the epidemic. In this briefing, we look at selected issues concerning debt financing granted to entrepreneurs in Poland in the form of facilities and bonds and the legal risks the parties to the transactions (debtors and creditors) should take into account when analysing the currently situation.