Ugandan Court Declares Syndicated Loan Illegal in Shock Ruling

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The Ugandan High Court on Wednesday ruled that a syndicated loan granted to a local company was illegal in a shock judgment that banks warned could lead to a spike in defaults on $1.5 billion of debt.

The case relates to a loan Diamond Trust Bank Kenya Ltd. provided to a Kampala-based firm with interests spanning real estate to agriculture, using its Ugandan subsidiary as the agent. Lenders in the East African nation were…

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