Articles by author
Ending LIBOR: a landmark ruling on Tough Legacy contracts
The High Court case Standard Chartered PLC v Guaranty Nominees Ltd [2024] EWHC 2605 (Comm) and others addressed “Tough Legacy” contracts, which referenced LIBOR but could not be amended consensually. Standard Chartered sought a ruling on substituting LIBOR with a similar rate after synthetic LIBOR stopped in 2024. In a strong and well-reasoned judgment, the two-judge court ruled that an implied term was needed for business efficacy. It endorsed CME Term SOFR with a spread adjustment as an objective alternative to LIBOR, enhancing contractual certainty for future cases. This decision underscores the Financial Markets Test Case Scheme’s value in resolving key financial uncertainties.
13 JAN 2025Are banks obliged to disclose credit adjustment spreads to SONIA?
LIBOR will be replaced by SONIA from the beginning of 2022. With SONIA rates typically lower than LIBOR, banks will seek to make up the difference by application of a Credit Adjustment Spread (CAS), likely to be calculated by reference to the median difference between LIBOR and SONIA over the previous five-year period. This article considers the extent to which banks will be required to disclose the existence of the CAS and its method of calculation to customers in the light of previous findings by the court of the lack of an obligation on banks to disclose the Credit Line Utilisation (CLU) to customers.
1 MAY 2021
