Feature

A review of private credit in the immediate wake of COVID-19

In the aftermath of the global financial crisis, private credit institutions emerged as being able to offer flexible financing solutions on short timeframes when compared to more heavily regulated banks. Traditional bank lending inevitably had slower processes and more limited scope to support nuanced credits. The strengths of the private credit model may well permit those institutions to advance their position further in the post-pandemic landscape. Whilst all private credits funds have as their objective a strong economic return, the context of each investment will determine the optimal approach each institution will employ to achieve that result.

The Lehman litigation: the waterfall keeps falling

In Lehman Brothers Holdings Scottish LP 3 v Lehman Brothers Holdings Plc (In Administration) [2021] EWCA Civ 1523, the Court of Appeal determined the priority of competing subordinated claims over the £800m to £1bn available in the distributing administration of LB Holdings Intermediate 2 Ltd and considered the common law position regarding part payment of a debt by a surety, as well as the rule against double proof.

Please release me, let me go: complexities in release provisions

Shanghai v Reignwood: what makes a guarantee “on demand”?

Guarantees are essential features of commercial financing transactions. But the nature of the guarantor’s liability may vary significantly. Is the guarantor liable only when the underlying obligor has defaulted on its obligations (a “see to it” guarantee) – or as soon as the guarantee’s beneficiary makes a good faith demand (an “on demand” guarantee)? Shanghai v Reignwood [2021] EWCA 1147 (Court of Appeal) illustrates the importance of the distinction, and how it can turn on fine points of construction.

Carbon credits under the UK Emissions Trading Scheme

The UK recently established a new Emissions Trading Scheme following the UK’s departure from the EU. This article explores the legal nature of carbon credits under the new UK Emissions Trading Scheme by reflecting upon the legislative framework underlying the scheme, the case law surrounding carbon credits under the EU Emissions Trading Scheme and recent developments regarding the legal status of cryptocurrencies as a form of intangible property.

Protection of client assets under Belgian law and trust-like structures

The purposes of this article is to give a brief overview of the reception of the trust concept under Belgian law, including the recognition of a foreign law trust, as well as to provide a description of certain trust-like structures under Belgian law.

A fresh look at the three Rs: the EU’s CCP Recovery and Resolution Regulation

The EU Regulation on Recovery and Resolution of CCPs came into law in February 2021. It sets a clear path for CCPs in near-terminal difficulties, broadly following previous international guidelines. New tools have been created to enable CCPs to recover, and a familiar toolkit has been made available to resolution authorities. Yet problems remain: the purpose of resolution is still unclear, the tools for resolution all have drawbacks, and the checks and balances on the process are weak. Nonetheless, this article concludes that the Regulation is a valuable model law for other jurisdictions, while important unanswered policy questions concerning CCPs should remain on the agenda for debate.

The social side of sustainable finance

This article looks at the rise of social loan financing spurred on recently by COVID-19 recovery financing and discusses the challenges for borrowers and lenders in using the use of proceeds and sustainability-linked social loan structures.

Decentralised finance (DeFi): a game-changer or just a passing fad?

DeFi is a term used to describe decentralised applications that provide financial services using blockchain technology. DeFi leverages on technologies such as smart contracts and open-source protocols to execute peer-to-peer transactions without the use of any centralised party. Given the increasing prevalence and receptiveness towards DeFi, stakeholders in the financial industry should possess some basic understanding of this new alternative to the traditional financial system. This article outlines the distinctive characteristics, underlying benefits and risks of DeFi applications, and the regulatory approaches towards regulating such applications.

Rise of the jumbo unitranche: a continuing trend in 2022?

In this article the authors unpack recent unitranche trends, identify reasons for the rising popularity of jumbo unitranche facilities and discuss what it may portend for the syndicated loan market.