In Practice
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Transferability: does there need to be a re-balance?
In the period leading up to (and during) a default or distress, the ability to trade loan positions takes on renewed significance, with transferability provisions in sharp focus. In recent years, the move towards more borrower/sponsor friendly documents has resulted in more restrictive “approved” lists and blanket restrictions on transfer to certain types of transferees (without consent). With those constraints driving more limited liquidity in the secondary market, it may be time to reflect on the extent of transfer restrictions, particularly where in practice, it may be beneficial to a borrower to move the debt away from the traditional lenders.
18 March 2024Does the “D” in PSD3 stand for “divergence”? PSD3 and payment services in the UK
In June, the European Commission published a set of proposals to modernise the payment services sector and bring it into the digital age. The package included proposals for a revised EU Payment Services Directive (PSD3) and a new set of EU Payment Services Regulations (EU PSRs and, together with PSD3, Payments Proposals). This In Practice article outlines some of the proposals and what they mean for the UK as it diverges from the EU payment services framework.
18 March 2024Embedded finance and chargebacks: consumer duty and proposition structuring
As embedded finance and payment models continue to develop, I consider: (i) how merchants and their payment solution partners balance offering customers the optimum checkout experience with providing appropriate consumer protections; and (ii) what these models mean for liability arrangements between merchants and fintechs.
18 March 2024Can the consent of an obligor be taken at face value?
Lenders and their legal advisors carefully check the capacity of obligors, and the due authorisation of their signatories, at the commencement of a deal. In this In Practice article, we consider the issues arising when consents are needed from obligors during the life of a facility. The recent case of CRF I Ltd v Banco Nacional De Cuba and another [2023] EWHC 774 (Comm) is a cautionary reminder of the consequences of failing to obtain required obligor approvals going forward.
18 March 2024Consolidation in the CLO management industry: hampered by EU and UK risk retention requirements?
In this In Practice article, the authors consider the regulatory restrictions that hamper the transfer of risk retention where a collaterised loan obligation (CLO) manager wants to solely acquire a CLO management contract from the incumbent CLO manager.
18 March 2024De-banking: what next for payment service providers?
The de-banking of customers, and the legal and regulatory implications that can arise, are not new issues. However, those issues have come into sharp focus following recent publicity surrounding a high-profile account closure. This In Practice article considers what payment services firms can expect next following the increased scrutiny from customers, media, government and the regulators.
18 March 2024Taking effective security over future acquired assets: the importance of contractual intention
Taking security over after acquired assets is often linked in case law to the equitable remedy of specific performance transforming a contractual right into a proprietary one to the charged property; an essential element to secured finance structures. A closer analysis illustrates contractual intention of the parties, rather than specific performance, is the key factor.
18 March 2024International financing structures: increased focus on withholding tax
The ability to obtain withholding tax relief on interest payments is crucial in many international financing structures. For borrowers, without treaty relief, the cost of borrowing from a non-domestic lender increases significantly; in the absence of relief, domestic withholding tax is likely to apply, so the borrower must increase the payment due to the lender, under a so-called gross up clause. This is not entirely one-way; a lender based in a jurisdiction without access to a network of favourable tax treaties is likely to find it too difficult to lend money to foreign borrowers at similar returns to those lenders with access to a wide treaty network. These issues arise not only for third party lenders, but also where a group wishes to finance its international operations. In either case, the parties involved will want to prevent any withholding tax leakage.
18 March 2024Overhauling the rules on the law of the arbitration agreement?
A departure from Enka v Chubb amongst the Law Commission’s proposals to finetune the Arbitration Act 1996.
18 March 2024Lender diligence over IPR and taking security over domain names
This article considers the importance of lenders conducting due diligence over intellectual property rights and the issues for lenders when taking security over domain names.
18 March 2024
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