Article 50 - Guarantees

(1) This Article applies where the actual conditions are made or imposed by means of a series of transactions which include—
(a) the receipt of a loan by a Person which is one of the AssociatedPersons ("the borrowing person"); and
(b) the provision of a guarantee by a Person which is the other of those Persons.
(2) Article 48(2) shall be construed as requiring account to be taken of all factors including—
(a) whether the guarantee would have been provided at all if the Persons had not been Associated;
(b) the amount that would have been guaranteed if the Persons had not been Associated; and
(c) the consideration for the guarantee and other terms which would have been agreed if the Persons had not been Associated,
but is subject to the following provisions of this Article.
(3) Where—
(a) a Person provides a guarantee in respect of another AssociatedPerson; and
(b) it is not part of the first Person's business to provide guarantees generally, the fact that it is not part of the first Person's business to provide guarantees generally shall be disregarded in construing Article 50(2).
(4) Article 48(2) shall be construed as requiring no account to be taken, in the determination of any of the matters mentioned in Article 50(5), of (or any inference capable of being drawn from) any guarantee provided by a Person with which the borrowing person is Associated.
(5) The matters are—
(a) the appropriate level or extent of the borrowing person's overall indebtedness;
(b) whether it might be expected that the borrowing person and a particular Person would have become parties to a transaction involving the receipt of a loan by the borrowing person or the making of a loan, or a loan of a particular amount, to that Person; and
(c) the rate of interest and other terms that might be expected to be applicable in any particular case to such a transaction.
(6) Article 49(5) also applies for the purposes of this Article.
Amended (as from 18th June 2014)