What's new?
Key developments from the past six months:
- LIBOR: 2024 brings a significant milestone for IBOR reform. US dollar LIBOR ceased publication at the end of September 2024. Three-month sterling LIBOR was published for the last time on 28 March 2024. This means that in the future there will be no further LIBOR rate quoted (for any tenor or currency). These rates had, of late, only been quoted on a synthetic basis (no longer relying on submissions from panel banks). Most parties will have made appropriate future-proofing arrangements to reflect this anticipated development. Nevertheless this 'cliff edge' event could lead to disputes about the appropriate substitute rate in all kinds of legacy contracts. Read this briefing for more.
- IOSCO report on good practices in the leveraged loan and CLO markets: In June 2024, the International Organization of Securities Commissions (IOSCO) published its final report on good practices in the leveraged loan and collateralised loan obligation (CLO) markets. The report provides an overview of these markets and their evolution since the global financial crisis. It explains why vulnerabilities identified here could impact IOSCO's objectives of protecting investors, ensuring markets are fair, efficient and transparent and reducing systemic risk. Finally, the report sets out twelve "good practices" for market participants. In a press release responding to the report, the Loan Market Association emphasises that the good practices are not intended to form the basis for new regulation / legislation, but rather to act as a reference point.
DORA
Financial entities within the scope of the EU's Digital Operational Resilience Act should note the deadline of 17 January 2025 to comply with its requirements. The remaining regulatory technical standards were only published 17 July 2024 (and 26 July 2024 for the delayed subcontracting RTS). This has increased the deadline challenges. This briefing focuses on the contract remediation aspect of a DORA compliance project.
Private Equity in focus
We are delighted to have contributed to the fifth edition of 'Private Equity : A Transactional Analysis', published by Globe Law and Business. The journal is edited by Travers Smith Senior Consultant Chris Hale. Our Finance and Restructuring teams have contributed two chapters.
- Private Equity restructuring: In this chapter authors James Bell, Kirsty Emery, Donald Lowe and Edward Smith consider the key elements of a restructuring in England as it relates to an unlisted UK company. We also review recent developments and their effect on the implementation of both debt and operational restructurings.
- Fund Finance – NAV Facilities: This chapter focuses on net asset value (NAV) facilities, a form of leverage at (or immediately below) fund-level which has increased in prevalence over the last five years. Authors Danny Peel, Charles Bischoff, Laura Smith and Adam Burk provide an overview of the key terms of NAV facilities, their structure and the due diligence involved in putting them in place, before stepping back to look more generally at their evolving use cases, recent controversies and market developments.
If you would like to receive a copy of either chapter, please get in touch.
Guarantees in focus
Corporate guarantees will typically be drafted using a beneficiary-friendly template as a starting point. Unsurprisingly, there is no industry standard "guarantor-friendly" template. In this article, first published in the July 2024 issue of Butterworths Journal of International Banking and Financial Law, Knowledge Counsel James Bell looks at issues to consider when protecting the guarantor's position in finance transactions (or indeed other commercial transactions) and how that might be negotiated.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
