The guarantees empowering investors in real estate finance

‘Bad boy’ guarantees offer lenders protection from unscrupulous sponsor behaviour, but definition and enforcement may present challenges, writes Stephenson Harwood's Daniel Andrews.

Daniel Andrews

Investors will always try to make sure their interests are protected when it comes to complex or high-risk transactions in real estate finance. One increasingly common tool being imported with greater frequency from the US to Europe is the so-called ‘bad boy guarantee’, also known as a carve-out guarantee.

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