Feature
615
“Red flags” and ostensible authority: reflections on Republic of Mozambique v Credit Suisse & Ors
The question of when an agent has ostensible authority to bind their principal has been the subject of several important decisions in recent years. That question arose again in Republic of Mozambique v Credit Suisse International & Ors [2024] EWHC 1957 (Comm) (Mozambique) in relation to whether the Mozambican finance minister had authority to enter into sovereign guarantees on behalf of the Republic of Mozambique (the Republic) with various lending banks. This article analyses some of the issues that arose in Mozambique in relation to ostensible authority and considers the “red flags” of financial crime relied upon by the Republic as putting the banks on inquiry that the finance minister did not have authority.
02 March 2025Protecting shareholders against transactions with an improper purpose
This article discusses the recent case of Tianrui (International) Holding Company Ltd v China Shanshui Cement Group Ltd [2024] UKPC 36, [2024] 3 WLR 986 in which the Privy Council explained the personal right of shareholders to challenge share issues undertaken for an improper purpose. The right derives from the contractual relationship between the shareholders and the company, and the fiduciary duties thereby imposed on the directors. The resulting claim has implications for banks that may be involved in a company’s activities, for example as lenders or corporate advisers.
02 March 2025Changing of the (safe)guard: the FCA’s proposals for payments and e-money firms
Payments and e-money firms are subject to a safeguarding regime designed to protect client funds. However, the Financial Conduct Authority (FCA) does not believe the regime is working. The proposals in CP24/20 are intended to address this problem. Interim-state rules will reinforce existing requirements, including by monthly regulatory returns and annual audits. End-state rules will move to a trust arrangement modelled on the regime for investment business, among other changes. As consulted on, the FCA’s proposals will place a greater compliance burden on payments and e-money firms. This may lead to increased enforcement action and consolidation within the sector.
02 March 2025Scottish limited partnerships and fund finance
In this article, the authors consider the versatility of Scottish limited partnerships (SLPs) in fund finance transactions and issues to consider when lenders take security over SLP interests.
02 March 2025Across the pond: practitioner’s guide to fortifying LMA forms for cross-Atlantic transactions
In this article, the authors provide contextual understanding of certain US provisions to supplement the Loan Market Association forms when representing lenders in transactions involving US-domiciled borrowers and/or US-domiciled credit support providers.
02 March 2025EU and UK implementation of Basel 3.1: a different approach?
In this article, the authors set out some of the key substantive differences between the EU and UK implementation of the Basel 3.1 standards on credit risk and consider the implications for global groups operating across these two jurisdictions.
02 March 2025Buy-now, pay-later: what the future will (and might) hold for the sector
Following concerns about potential material consumer indebtedness arising from the exponential growth in the ready availability of buy-now, pay-later (BNPL) credit products, and some four years after the 2021 Woolard Review concluded urgent action was needed to address that, 2025 is set to see the enactment of legislation that brings the majority of traditional BNPL within the scope of the Financial Service and Markets Act 2000 and the Consumer Credit Act 1974. The Financial Conduct Authority is then charged with delivering a tailored conduct of business framework so that, in 2026, most BNPL will be offered within a regime that provides appropriate levels of consumer protection while ensuring that lenders are not deterred from continuing to offer these useful interest-free products. This article examines the new regulatory perimeter, how the proposals aim to meet the requirements for proportionality and protection and what the alternatives might be for existing lenders.
02 March 2025The lucrative AI debt market – disrupting traditional debt lending: Part 1
In two parts, the second to be published in the next issue, we discuss the burgeoning debt market in artificial intelligence (AI) and how this could disrupt traditional debt lending frameworks if such frameworks are not adapted to AI companies. This Part 1 discusses how the unique nature of AI companies could present distinct challenges to financial covenants in traditional lending frameworks if not properly considered in the context of such companies. Part 2 will then discuss how the unique nature of AI-related assets could present similar challenges to the process of security enforcement in traditional lending frameworks if not properly considered in the context of such assets.
02 March 2025Deconstructing delayed draw term loans
In this article we delve into the detail of delayed draw term loans. This has predominantly been a common feature in the private credit market, but lenders in the broadly syndicated loan market have started to offer the product too as competition between the two markets heats up.
02 March 2025A smarter ring-fencing regime: all change?
In this article, Jochen Vester provides an overview, and assessment, of the recent changes to the UK bank ring-fencing regime, that entered into force on 4 February 2025.
02 March 2025
