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Transfers of risk or risky transfers? Transferring hedging positions in respect of non-performing loans
There are a number of key decisions to be made when a hedge counterparty wishes to transfer a hedging position in respect of a non-performing loan. These decisions are driven by legal and commercial considerations in the context of the transaction documents. A number of these considerations are set out below, but each transaction is different and additional considerations may arise. Unless otherwise indicated, this article will assume that if the transaction terminated, the borrower would be obligated to make a payment to the hedge counterparty and that the hedging is entered into under the terms of an ISDA master agreement (hereafter, an ISDA). For ease of reference, the existing hedge counterparty is referred to as the hedge counterparty and the proposed transferee as the transferee, whether before or after any transfer.
25 March 2024Something in the ether? The allure of digital bonds
Digital (or crypto) assets are currently attracting considerable scrutiny from global regulators and generating voluminous copy for the world’s media. However, the digital assets spectrum is incredibly wide. Although using the same type of underlying technology as cryptocurrencies, digital bonds are strikingly different: they are (typically) regulated instruments, supported by new legislation in key jurisdictions and by some high-quality issuers. In this article, the authors consider both the allure and the challenges of digital bonds.
25 March 2024The National Security and Investment Act 2021 revisited: when are secured creditors obliged to make mandatory notifications?
The National Security and Investment Act 2021 (NSIA or the Act) is a complex and wide-ranging piece of legislation with the potential to impact many acquisitions and other corporate transactions. It empowers the Secretary of State for Business, Energy and Industrial Strategy (the Secretary of State) to review and where appropriate, intervene in investments in qualifying entities and assets that have given, or may give rise to a risk to national security. Since the NSIA came into force at the beginning of 2022, its practical implications have inevitably come to the fore. This includes how the Act’s mandatory pre-notification requirements apply to creditors taking security over shares in entities operating in qualifying sectors of the economy. While the government’s intent seems clear in terms of when the NSIA will impact secured creditors, the text of the Act itself and related guidance have resulted in some questions among practitioners.
25 March 2024Reforms to Unexplained Wealth Orders: the sword and the shield
Following the Russian invasion of Ukraine on 24 February 2022, the Economic Crime (Transparency and Enforcement) Act 2022 (ECA) made swift passage onto the statute books. Part 2 reforms the regime governing Unexplained Wealth Orders (UWOs). The Act was heralded by the Home Secretary as “remov[ing] key barriers to the use of unexplained wealth orders”, “chang[ing] the entire way in which UWOs are operationalised”, and giving law enforcement agencies (LEAs), particularly the National Crime Agency (NCA), the “legal basis, legal powers and protections they need” (Hansard, 7.3.22). This article explores the reforms to UWOs, analyses whether they address shortcomings in the regime as initially implemented, and discusses whether the government’s intentions are likely to be fulfilled.
25 March 2024Talking about a revolution: making ESG securitisations mainstream
This article considers the constraints hampering environmental, social and governance (ESG) securitisations and the ESG securitisation market generally including the current regulatory framework, the various forms an ESG securitisation can take and possibly policy solutions to stumbling blocks in the market.
25 March 2024Unanswered questions regarding the Restructuring Plan
The Restructuring Plan was introduced to the Companies Act in June 2020. Since then, there have been numerous cases – some of which have involved challenges by interested parties – which have elucidated the correct approach to convening meetings, and to providing sanction for Restructuring Plans. However, important unanswered questions remain, including as to the exercise of the cross-class cram down power where one or more of the dissenting classes is “in the money”.
25 March 2024Is your MAE/MAC clause ready for the next pandemic?
In this article, Sa’ad Hossain QC considers lessons for the draftsmen of MAE/MAC clauses from the recent Travelport v WEX litigation.
25 March 2024Interest under a loan linked to a base rate: issues to consider
This article considers the issues that it is suggested finance lawyers should have in mind if asked to advise on a proposed loan where the interest payable is to be linked to the Bank of England bank rate, the base rate of another central bank, or the base rate of the lender. The author focuses on key differences between different methods of calculating interest, how interest rates can be structured and various practical issues that arise.
25 March 2024It is dangerous to use pithy terms to describe the complex risks of a fund
For marketing purposes, the complex and multiple risks of a fund are often summarised in catchy terms which ultimately are inaccurate or incomplete. This can lead to a charge of misrepresentation and censure by the regulator and litigation by the investors.
25 March 2024Interpreting statutes and contracts: what are the differences? Part I
In this Part 1, Richard Calnan discusses the similarities between contractual and statutory interpretation and then explores one important difference. Part 2, to be published in a later edition, will discuss three other important differences.
25 March 2024
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