In Practice

On 29 November 2022, Mr Justice Butcher handed down judgment in LMN v Bitflyer Holdings Inc. and others [2022] EWHC 2954 (Comm), which is the first successful Bankers Trust application against overseas cryptocurrency exchanges based on the new “disclosure gateway” for service out of the jurisdiction at CPR Practice Direction 6B §3.1(25).

In September ((2022) 8 JIBFL 560) we outlined that embedded finance is the availability of financial products, integrated into a company’s infrastructure, provided by non-financial institutions (platform lenders) and capitalised by “traditional” financial institutions. One of the benefits of embedded finance is an enhanced customer experience. This customer-led approach will become more important in the current and forecast economic environment. COVID-19 drove a change in consumer habits and demands and saw record valuations for fintechs. However, as the world economy faces an increasingly challenging outlook, there has been a so-called “rebalancing” of these high valuations. In July 2022 credit card transactions by UK cardholders were up by nearly 10% on last year (UK Finance) and global e-commerce revenues are forecast to shrink for 2022. Does this signal trouble ahead for embedded finance?

This In Practice article considers some of the exclusions from the Trust Registration Service requirements that may be applicable to express trusts found in lending transactions.

In this In Practice article the authors summarise the key features of the proposed changes to the UK listing regime.

In the current economic landscape, which is plagued with high inflation and interest rates, the legal agreements covering intra-group loan transactions are being reviewed with a fine-tooth comb from an arm’s length perspective. This is because loan agreements are a starting point for any transfer pricing analysis and if done properly (ie are arm’s length) can assist in justifying interest deduction locally ensuring that there is no, to limited, double taxation. The question is however – what does an arm’s length loan agreement entail? In this In Practice article, we explore this question and highlight the key aspects to consider with their potential repercussions.

Companies have been publicly reporting on their financial performance for over a hundred years. However, they are increasingly having to make public non-financial disclosures relating to sustainability and environmental, social and governance (ESG) matters as a result of rules, laws and regulations issued by stock exchanges, governments and regulators worldwide. In the context of non-financial reporting, there has been increasing awareness of the concept of “double materiality” in recent years. In this article we clarify what “double materiality” means and provide the context of its regulatory background within the EU. We also consider the significance of “double materiality” and give our views on the potential consequences for companies of non-compliance.

In the current environment of inflation and higher interest rates, securitisations may play an increasingly prominent role in offering access to cheaper and diversified funding. In this article, the authors explain why a corporate group may wish to consider exploring whether a securitisation would be available to it – and permitted under any existing high yield and/or leveraged loan documentation.

Over the last decade, financing transactions have moved away from typical senior/mezzanine loan structures to a wider variety of products including syndicated loans, first lien/second lien loans, direct lending and high yield bonds (and in some cases, a hybrid of them). This has increased lenders’ attention on the intercreditor terms, which establish the relationship and priority between the different types of creditors in the financing structure, particularly in the circumstances when things go wrong. In this In Practice article, the authors consider the key terms of intercreditor agreements that creditors should be focused on during negotiations and, how these and other provisions differ between a structure comprised of senior and junior loans (Senior/Junior Structure) and a structure comprised of notes, each accompanied with a super senior revolving facility (Notes/SSRCF Structure). ¹1 1

In this In Practice article, James Barrett considers several key practices which can help a corporate witness to prepare for giving evidence including to courts and public inquiries.