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Credit defaults: practical tips when pressing the accelerator
We consider the practical steps and considerations for creditors when faced with a potential event of default (EOD) under their credit documentation. We also assess the consequences for a creditor in taking enforcement action in reliance on an EOD that has not actually occurred, cannot be relied on, or is disputed.
19 March 2024On the regulatory discretion to write off AT1 capital
In the wake of the receivership of Silicon Valley Bank and the Signature Bank failures, Swiss regulators brokered a deal to stabilise Credit Suisse (CS). The acquisition of CS by UBS was the first use of the tools designed to end too big to fail. The write off of CS’s AT1 capital highlights the discretion available to regulators to deviate from the hierarchy of claims when a bank is distressed.
19 March 2024The “purview” principle in an era of rising interest rates
In this article, barrister Marcus Mander considers the application of the “purview” principle in an era of rising interest rates, highlighting a few potential complexities.
19 March 2024Sustainability-linked loans: how “green-washing” risk is mitigated in documentation
In this article Greg Brown considers two recent clauses that are increasingly being included in sustainability-linked loan documentation to provide lenders with protection from the risks of “green-washing”.
19 March 2024ISDA Definitions 2021: Calculation Agent now required to produce objectively reasonable result
The recent amendments to the ISDA Definitions now require the Calculation Agent to perform its functions “in good faith and using commercially reasonable procedures to produce a commercially reasonable result”. This requires an objectively reasonable result, a more restrictive requirement than under the 2006 Definition. In turn, this means that determinations of the Calculation Agent are likely to be more open to challenge than under the previous definitions, which may generate an increased number of disputes. However, the additional protection offered by the requirement of a “reasonable result” should provide additional comfort to all parties. In any event, the amendments should encourage market participants to give careful consideration to whether they are willing to specify one of the parties to the transaction as Calculation Agent.
19 March 2024When Singapore REITs go under: risks and solutions for lenders
In this article the authors discuss the fundamental differences, from a Singapore law perspective, in how creditors might be treated in the insolvency of a real estate investment trust (REIT) compared to the insolvency of a company and explore some possible structures and mechanisms which might enable a REIT and its creditors to restructure or wind up a REIT synthetically. (In the UK, a REIT is a UK company limited by shares, with separate legal personality, so the issues raised in this article do not apply to UK based REITs).
19 March 2024Different jurisdictions’ approaches to Quincecare: England and Wales lead the expansive approach
Singularis remains the only case in England and Wales to establish breach of the Quincecare duty. So, is the industry getting carried away with the hype in circumstances where, on sober reflection, there may not be much of substance to be seen here? We chart the development of the Quincecare duty in various jurisdictions, before proposing an appropriate purview for the duty.
19 March 2024The National Security and Investment Act 2021: secured lenders can take comfort in latest guidance but exercising voting rights remains a risk
In this article Rebecca Oliver considers how the further market guidance published in July 2022 by the Department for Business, Energy and Industrial Strategy (BEIS) – which includes commentary on the application of the National Security and Investment Act 2021 (NSIA) to security arrangements – helps secured lenders. The article considers where lenders still need to be wary of the NSIA implications and suggests how lenders and their advisers might limit NSIA risk in lending structures.
19 March 2024Claiming subrogation where a debt owed by a third party is discharged by a payment made by mistake
In this article Matthew Parker KC considers the remedy of subrogation where money is provided by mistake. The context is Citibank’s mistaken US$500m payment to lenders which has now, on appeal, been held not to have discharged Revlon’s debt. This follows Matthew’s earlier article in the July/August 2021 edition, ‘Payments by mistake: when will the discharge of an existing debt be a defence to a claim for repayment’ (2021) 7 JIBFL 457.
19 March 2024Russian sanctions in the English courts
This article considers the effect of sanctions imposed by the UK following Russian’s invasion of Ukraine in February 2022 on litigation, commercial transactions and insolvency, via an overview of a series of decisions of the English High Court in these areas.
19 March 2024
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