Feature

Syndicated loan market and LIBOR: pathway to the end of 2021

With just under a year until the demise of at least certain settings of LIBOR, 2021 will be the definitive year for progress and development of market practice. In the sterling syndicated loans market, although much progress has been made to date, both the target of the Working Group on Sterling Risk-Free Reference Rates (£RFRWG) that there should be no new issuance of sterling LIBOR based loans after the end of Q1 2021 and the stock of legacy LIBOR referencing loans mean there is still much work to do. In this article, we take stock of recent developments and examine the pathway to the end of 2021 for the syndicated loan market.

Translations: creating legally effective smart derivatives contracts

Smart derivatives contracts have the potential to deliver significant efficiency benefits to derivatives market participants. However, automating legal documentation is a specialised task and lawyers have a crucial role to play in ensuring automation is legally and operationally effective. Developing smart derivatives contracts will require lawyers to enhance the levels of standardisation within industry standard contracts and contribute towards the development of legal agreement data models that will serve as the foundation for smart derivatives contracts.

Intercreditor agreements and the new Restructuring Plan

In this article the authors consider how the new Restructuring Plan under English law interacts with intercreditor agreements which have voting restrictions and other contractual prohibitions on creditor actions.

Big data, ethics and financial services: risks, controls and opportunities

With use of big data growing exponentially over the past ten years, how are legislators and regulators addressing big data and artificial intelligence, and what are the key considerations for financial services firms at this time? We explore these themes below.

Effects of credit guarantee schemes on secured transactions frameworks

The importance of a modern secured transactions framework for movable assets that effectively channels credit to the SME sector has been widely recognised. However, a modern secured transactions framework may not spur market-based collateralised lending if a public credit guarantee scheme disincentivises lenders and borrowers from engaging in it. Improperly designed schemes cause many market distortions, including slower growth, profitability and sustaining zombie companies. As Japan embarks on secured transactions reform, it needs to consider the role of its credit guarantee scheme in facilitating collateralised lending. The lessons this article outlines should be instrumental in other economies.

The Digital Dispute Resolution Rules: the future of digital disputes

This article summarises some of the key points arising out of the newly published Digital Dispute Resolution Rules (Digital DR Rules). The advantages of adopting the Digital DR Rules are explored as well as considering how the rules might be incorporated into new and existing agreements.

The new 2021 ISDA Interest Rate Derivatives Definitions: the end of discretion?

The publication of the new 2021 ISDA Interest Rate Derivatives Definitions (2021 Definitions) marks the first comprehensive update of ISDA’s definitions booklet for interest rate products since the publication of the 2006 ISDA Definitions (2006 Definitions) in January 2007. It is a significant undertaking, making a very wide variety of changes to take account of, among other things, benchmark reform, the new regulatory environment for bank resolution, the introduction of collateral rules and central clearing. In addition, there will also be a new electronic ISDA user interface called MyLibrary which will be updated as changes are made to the definitions. This article analyses the changes to the cash settlement provisions.

Rank inequality: the consequences of the creation of “super priority” debts under the Corporate Insolvency and Governance Act 2020 moratorium

In this article the authors consider the consequences of the creation of “super priority” debts under the Corporate Insolvency and Governance Act 2020 (CIGA) moratorium, including the effect on secured creditors, priority as between holders of Super Priority debt and the potential impact on floating charge holders.

Do BNP v Trattamento and Fine Care v Natwest show the courts retreating from the principles established in First Tower Trustees?

The European Commission’s targeted consultations on European Union settlement finality and financial collateral rules

The previous occasion on which we heard from the European Commission on the directives (an interpretative communication in March 2018)³ was somewhat of a non-event. In relation to key issues of interpretation, related to the question of which law governs the proprietary aspects of collateral transactions in book-entry securities, the Commission “clarified” that all the divergent approaches taken by member states were valid under the relevant directive provisions.⁴ In fact, despite their undoubted importance to the Commission’s longstanding aim of achieving integrated capital markets in Europe, relatively little has been said about the directives at EU-level, leaving it largely up to member states to define their scope and operation. In contrast, the consultations raised a number of important and interesting policy ideas. I will discuss a few of these below, as well as consider whether there are other material issues to be addressed in an eventual amendment to the directives in order to meet their objectives. I will argue that a review of the directives should prioritise the full resolution of the conflicts of laws that cross-border systems and financial collateral transactions present.