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The lucrative AI debt market – disrupting traditional debt lending: Part 1
In two parts, the second to be published in the next issue, we discuss the burgeoning debt market in artificial intelligence (AI) and how this could disrupt traditional debt lending frameworks if such frameworks are not adapted to AI companies. This Part 1 discusses how the unique nature of AI companies could present distinct challenges to financial covenants in traditional lending frameworks if not properly considered in the context of such companies. Part 2 will then discuss how the unique nature of AI-related assets could present similar challenges to the process of security enforcement in traditional lending frameworks if not properly considered in the context of such assets.
02 March 2025Scottish limited partnerships and fund finance
In this article, the authors consider the versatility of Scottish limited partnerships (SLPs) in fund finance transactions and issues to consider when lenders take security over SLP interests.
02 March 2025Protecting shareholders against transactions with an improper purpose
This article discusses the recent case of Tianrui (International) Holding Company Ltd v China Shanshui Cement Group Ltd [2024] UKPC 36, [2024] 3 WLR 986 in which the Privy Council explained the personal right of shareholders to challenge share issues undertaken for an improper purpose. The right derives from the contractual relationship between the shareholders and the company, and the fiduciary duties thereby imposed on the directors. The resulting claim has implications for banks that may be involved in a company’s activities, for example as lenders or corporate advisers.
02 March 2025Across the pond: practitioner’s guide to fortifying LMA forms for cross-Atlantic transactions
In this article, the authors provide contextual understanding of certain US provisions to supplement the Loan Market Association forms when representing lenders in transactions involving US-domiciled borrowers and/or US-domiciled credit support providers.
02 March 2025EU and UK implementation of Basel 3.1: a different approach?
In this article, the authors set out some of the key substantive differences between the EU and UK implementation of the Basel 3.1 standards on credit risk and consider the implications for global groups operating across these two jurisdictions.
02 March 2025Changing of the (safe)guard: the FCA’s proposals for payments and e-money firms
Payments and e-money firms are subject to a safeguarding regime designed to protect client funds. However, the Financial Conduct Authority (FCA) does not believe the regime is working. The proposals in CP24/20 are intended to address this problem. Interim-state rules will reinforce existing requirements, including by monthly regulatory returns and annual audits. End-state rules will move to a trust arrangement modelled on the regime for investment business, among other changes. As consulted on, the FCA’s proposals will place a greater compliance burden on payments and e-money firms. This may lead to increased enforcement action and consolidation within the sector.
02 March 2025A smarter ring-fencing regime: all change?
In this article, Jochen Vester provides an overview, and assessment, of the recent changes to the UK bank ring-fencing regime, that entered into force on 4 February 2025.
02 March 2025The perils of relying on book entries in intra-group loan agreements
Intra-group loan agreements are a common feature of corporate life. For convenience, they are often recorded as simple book entries, rather than formally documented by loan agreements. This article considers the potential benefits and dangers of this practice.
02 March 2025Identifying the place of performance in English law transactions involving foreign banks
The rule in Ralli Bros will excuse non-performance of an English law obligation where performance necessarily involves an act prohibited by the law of the place of performance. However, the courts have not given clear guidance on identifying the place of performance where a foreign bank plays an ancillary role in the performance of such an obligation. While there is good reason to consider that payment of liabilities in a foreign currency, or to a foreign account, necessarily involves performance in a foreign country, each contract or instrument must be carefully examined to determine what precise acts fall to be performed, and where.
09 February 2025National Security and Investment Act 2021: three years later
In this article, Adam Eckersley-Waites reviews some outstanding issues relating to the National Security and Investment Act 2021 relevant to finance practitioners and two recent noteworthy developments.
09 February 2025
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