a) Asset Securitisation vs. Loan Security:

• Asset Securitisation: Involves pooling assets (e.g., loans, receivables) into a special purpose vehicle (SPV), issuing securities backed by cash flows. It’s off-balance-sheet financing, transferring risk to investors. In Ghana, used post-DDEP for liquidity, aligning with BoG’s recapitalization guidelines (e.g., Notice No. BG/GOV/SEC/2023/05), but requires true sale to avoid recharacterization as secured loan under Act 930.
• Loan Security: Collateral (e.g., mortgage, pledge) granted to secure a specific loan, remaining on-balance-sheet. Lender has direct recourse to assets upon default. Practical in Ghanaian lending, like Ecobank taking property security, enforced via courts under the Borrowers and Lenders Act, 2020 (Act 1052). Key difference: Securitisation transfers ownership/risk; security retains it with lien.

b) Confirming Bank vs. Nominated Bank:

• Confirming Bank: Adds its confirmation to a letter of credit (LC), undertaking independent payment obligation if documents comply. Under UCP 600, it’s liable even if issuing bank defaults, common in high-risk trades. In Ghana, Stanbic might confirm for exporters to mitigate counterparty risk.
• Nominated Bank: Designated by issuing bank to pay/negotiate under LC, but no independent liability unless it confirms. Acts as agent, with recourse to issuing bank. Difference: Confirming assumes risk; nominated facilitates without.

c) Governing Law in a Loan Agreement vs. Legal Opinion for a Loan Facility:

• Governing Law: Clause specifying law (e.g., Ghanaian or English) applicable to interpret/enforce the agreement. Influences validity, per Rome I, crucial for cross-border loans to avoid conflicts under Ghana’s private international law.
• Legal Opinion: Independent assessment by borrower’s counsel on capacity, enforceability, and compliance (e.g., no withholding tax issues). Covers opinions on status/power, not just law. In practice, BoG requires for large facilities; difference: Governing law sets rules; opinion verifies applicability.

d) Repayments vs. Prepayments in Loan Transactions:

• Repayments: Scheduled principal/interest payments per agreement, often amortized. Mandatory, with penalties for missed (default trigger). In term loans, structured for cash flow matching, compliant with BoG’s lending guidelines.
• Prepayments: Voluntary early repayment, reducing interest. May incur fees (break costs for fixed rates). Difference: Repayments are obligatory/timetabled; prepayments optional, potentially with clauses limiting them to protect lender’s yield.

e) Country Risk vs. Sovereign Risk:

• Country Risk: Broader exposure to economic/political events in a country affecting all borrowers (e.g., Ghana’s 2022 DDEP impacting private firms via inflation/exchange controls).
• Sovereign Risk: Specific to government/default on obligations, including immunity under State Immunity Act 1978. In Ghana, post-cleanup, banks assess via ratings; difference: Sovereign focuses on state; country encompasses private sector too.