Feature

Pitfalls with board resolutions authorising loan facilities

Directors sometimes express doubt as to what role a company’s board should play, once authority to negotiate and enter into a loan facility has been delegated to one or more of their number. If new terms are offered or circumstances change, which alter the suitability of the proposed finance, what can, or should the remaining directors do? In turn, what should the appointed director(s) do? This article explores some of the issues and considers how some pitfalls might be avoided.

Fund finance and sustainability: new guidance on the application of the SLLPs

Over recent years there has been significant growth and development in the fund finance industry, which has expanded over the last decade into a global market now worth more than US$600bn, according to the asset manager abrdn. As the market has continue to mature, the variety of tools available to investors (which include private equity, private credit and venture capital) to fund their operations has expanded considerably beyond the traditional subscription facility to encompass many more types of fund financing. One such innovation has been the introduction and adoption of sustainable finance, either by the way of use of proceeds facilities (green loans) or sustainability-linked loan facilities. 

In light of the increased use of ESG-linked financing in the fund finance market, on 5 March 2024 the Loan Market Association, Asia Pacific Loan Market Association, Loan Syndications and Trading Association and the Fund Finance Association published 'A Guide to the Application of the Sustainability Linked Loan Principles in Fund Finance' (Guide), which provides practical guidance to market participants on how the Sustainability Linked Loan Principles can be used the fund finance market, as well as identifying and addressing challenges and considerations  particular to fund finance transactions. 

In this article we will examine the use of sustainability-linked financing in the fund finance market and consider some of the issues raised by the Guide. 

Artificial intelligence in syndicated lending

Banks are technology companies subject to vertical (that is, industry-specific) regulation. The ABA Banking Journal reports that: “This region [North America], with a history of strong investment in banks’ technology foundations, will see IT spending grow to $100.4 billion by 2027…”. AI adoption and deployment forms part of this anticipated spend. Alongside AI, tokenisation of debt instruments will create a new model in syndicated loan markets. This article explores the current position on AI in syndicated lending.

Enhancing trust in ESG ratings: welcome moves to fix the ecosystem

In this article, we consider the encouraging progress being made in the introduction of voluntary and mandatory solutions to address identified shortcomings and promote greater consistency, reliability and trust in the market for ESG ratings.

A mortgagee’s accountability for mortgage valuations following Shokrollah-Babaee v EFG Private Bank

This article considers the judgment of Miles J in Shokrollah-Babaee v EFG Private Bank Limited  [2023] EWHC 3270 (Ch), how it affects the relationship between mortgagees, valuers and mortgagors (to the extent that it can fairly be described as a relationship at all) and its wider impact.

Going cashless: the treatment of cryptoassets in insolvency proceedings

The transaction volume of cryptoassets and associated products has witnessed rapid expansion, with recent reports indicating that the cumulative market value for cryptocurrencies alone has now exceeded $3trn. This growth has, in turn, increased the likelihood of both cryptoasset-related businesses (such as exchanges and custodian wallet providers) entering into formal insolvency processes, and cryptoassets featuring within insolvency proceedings. Accordingly, this article considers how cryptoassets are treated within English insolvency law, focusing on their classification as property, jurisdictional issues arising from their decentralised nature, the enforcement of security interests, and the challenges of valuation and distribution.

Does the restoration of Crown preference mean that guarantors can get off the hook?

When the economic landscape changes, people often look to wriggle out of their financial commitments. Just such a change occurred in 2020, when HMRC’s status as a preferential creditor of insolvent companies was restored.

Joining the dots: a wider use for AML e-verification tools?

Everything is electronic nowadays. Globalisation, technology and Covid have all played a significant part in driving legal changes that mean it is rare not to be able to sign documents, open bank accounts or indeed do most things using just a keyboard or a click. But can established processes help to mitigate the risks of more newly permitted e-signatures? This article looks at how anti-money laundering identity verification processes can help with verification of document signatories.

The role of the sustainability co-ordinator in sustainability linked loans

In this article the authors consider how the increasing prominence of sustainability linked loans has afforded new opportunities for banks to take on the role of sustainability co-ordinator and take a closer look at what this role entails.

Bridging the gap: high yield bridge loans in leveraged buyouts

In this article the authors examine the key features of high yield bridge loan documentation and latest trends in the leveraged buyout market.