Purchasing and selling loans in Cyprus

Cyprus has enacted legislation which completes its framework regulating the purchase and sale, as well as the securitisation of credit facilities. This note covers the purchase and sale of credit facilities, while our parallel update covers securitisations of loans in Cyprus.

Credit facilities which can be acquired and sold consist of:

  • any credit facility contract, including, inter alia, loans and credit card overdrafts, from which amounts remain outstanding, irrespective of whether such facility was terminated or has expired
  • rights and obligations of a creditor against a primary debtor as these result from a civil court judgment in relation to a credit facility, provided amounts remain outstanding under such judgment

The following entities are able to acquire credit facilities:

  • credit-acquiring companies established in Cyprus and authorised to acquire credit facilities pursuant to the provisions of the Law by the Central Bank of Cyprus (CBC), which must have a paid-up issued share capital of at least €100.000
  • credit institutions incorporated in and authorised under Cyprus law
  • credit institutions licensed and supervised by the competent authorities of an EU Member State and entitled to establish a branch in Cyprus
  • financial institutions, which are subsidiaries of credit institutions licensed in an EU Member State and which provides services or carries out business in Cyprus through a branch in Cyprus.

Any credit facility transferred to a purchaser following its acquisition is transferred together with all rights and obligations arising under the terms of the contract for such facility and shall be valid as between such purchaser and the original debtor. The time at which the credit facility is transferred is that agreed between the seller and purchaser in their relevant agreement.

Read our full update on the purchase and sale of credit facilities in Cyprus or contact us to discuss your precise requirements.