Feature

Hedging and lending: a practical guide

In this article the authors provide an overview of the relevant legal and documentation issues arising from the hedging and lending relationship in commercial lending.

The spectre of Spectrum: after Avanti and the sliding scale of floating to fixed charges

That case raises interesting practical questions on drafting within existing debentures and especially when considering the increasing prevalence of New York-law governed covenant packages in sponsor-friendly facility agreements and other debt documents. Those documents often include restrictions on the borrower’s ability to dispose of its assets. More importantly, they include exemptions to those restrictions where automatic release of the collateral is granted under the terms of the documents. How far can those exemptions go before a fixed charge is re-characterised? Avanti has clarified that horizon between fixed and floating charges, possibly moving where many commentators thought it had been. It renews the relevance of that horizon for charges in practice . The consequence is that some charges once thought floating are in fact fixed.

Are sole director companies all acting unlawfully?

The question of sole director companies has been thrown into some doubt by Idrees Hashmi v Paul Lorimer-Wing [2022] EWHC 191 (Ch), also known as Re Fore Fitness Investments Holdings Limited. If it is correctly decided, and sadly no appeal seems pending, then it could have very serious consequences for sole director companies – at least for anyone using the Model Articles set out in the Companies (Model Articles) Regulations 2008/3229 (Model Articles).

Interpreting ICC standardised rules in trade finance disputes: courts take an international perspective

Banking practice in areas of trade finance such as demand guarantees and letters of credit is standardised by a collection of contractual rules published by the International Chamber of Commerce (ICC). The application of domestic contractual interpretation principles may risk inconsistency in the way such rules are construed between jurisdictions. However, in relation to the most commonly used rules (the UCP 600, which apply to letters of credit), several courts (including the English courts) have tried to ensure that the rules are interpreted consistently with reference to their international consequences, as opposed to strictly in accordance with the governing law of the contract. Two decisions of the English High Court and the Qatari Appellate Court demonstrate a trend towards construing other sets of ICC standardised rules in the same way as the UCP 600.

Giving notice under an ISDA: lessons learned and potential new approaches

All references to the ISDA Master Agreements in this article apply to both the 2002 ISDA Master Agreement and the 1992 ISDA Master Agreement unless otherwise specified.

The growing emergence of competitive tension in the liquidity market

In the current climate, borrowers are more likely to encounter liquidity issues rather than covenant breaches and are increasingly turning to private credit for time-sensitive cash injections, primarily due to the flexibility private credit providers offer. As these new creditors enter the debt stack, conflicts between them and existing creditors may well emerge. Sponsor-backed borrowers are increasingly deploying tactics popularised in the US to prime existing lenders who fail to follow their money. However, the need for new money to have super-seniority, to benefit from downside protection and obtain access to upside recoveries requires creative structuring.

Board minutes after Sequana: practical advice for the corporate drafter

In this article, in light of the decision in BTI 2014 LLC v Sequana SA [2022] UKSC 25, Philip Morrison seeks to offer practical advice, including which considerations should be included, when drafting board minutes.

Blue pill or red pill? Into the Tulip Trading rabbit hole

Lessons from the SVB collapse for banking regulation

In this article Avinash Persaud considers the more immediate and the lasting lessons from the recent bank crisis.

Sustainability-related disclosures:EU SFDR v UK SDR

The EU Sustainable Finance Disclosure Regulation ((EU) 2019/2088) (SFDR) and the EU Taxonomy Regulation and the UK Sustainable Finance Disclosure Requirements (SDR) and labelling regime both aim to increase transparency, investor protection and disclosure around sustainable finance products and the climate impact of investments. Both the SFDR and SDR and emerging regimes in the US and internationally are designed to meet market concerns around the need for improved climate disclosure requirements. In this article, we seek to compare the key themes and features of the SFDR and SDR to determine possible areas of divergence and convergence particularly for those firms who need to consider the applicability of both the UK and EU requirements to their products and services. We set out below a recap of both regimes and significant areas of difference between the two UK and EU regimes in particular.