Default (Banking & Finance) meaning

In this issue: Lending Sustainable finance Debt capital markets Derivatives Regulation for derivatives lawyers Daily and weekly news alerts New and updated content Useful information Lending Email correspondence can give rise to waiver of facility agreement (Little v Olympian Homes Ltd) This matter concerned two bids to set aside statutory demands that arose from personal guarantees linked to a facility agreement. The principal sum was settled late, prompting the lender to issue statutory demands for default interest due under that agreement. The applicants maintained that the lender had surrendered its right to contractual interest via email correspondence (contractual waiver) or, in the alternative, through its conduct (waiver estoppel). The court made it plain that the applicants could not rely on any suggestion of an oral waiver of the facility agreement’s terms, because the agreement expressly stipulated that any contractual waiver must be in writing...

Banking & Finance—December 2024 and January 2025 case round-up R (on the application of LIT FM Holdings UK Ltd and another) v Chancellor of the Duchy of Lancaster in the Cabinet Office (formerly Secretary of State for Business, Energy and Industrial Strategy) [2024] EWHC 2963 (Admin) Challenge to an unwinding order under the National Security and Investment Act 2021 The claimants, companies within the LetterOne Group established to make long-term investments in other businesses across the energy, technology, health and retail sectors, pursued re-amended judicial review grounds seeking a quashing order, declarations and damages under sections 7 and 8 of the Human Rights Act 1998. Their challenge targeted a ‘Final Order’ (the Order) issued pursuant to section 26(3) of the National Security and Investment Act 2021 on national security grounds. The Order obliged the first claimant to divest 100% of its shares in Upp Corporation Limited, a fibre broadband start-up. Permission to seek judicial review was granted on two grounds, but those grounds were dismissed on the...

In this issue: UK, EU and international regulators and bodies Authorisation, approval and supervision Prudential requirements Financial crime and sanctions Consumer protection Investigations, enforcement and discipline Regulation of capital markets Regulation of derivatives Sustainable finance and ESG Banks and mutuals Investment funds and asset management UK MiFID II EU MiFID II Consumer credit, mortgage and home finance Regulation of insurance Payment services and systems Fintech and cryptoassets Regulation of AI in FS Dates for your diary Financial Services Enforcement Database Daily and weekly news alerts LexTalk®Financial Services: a Lexis®Nexis community UK, EU and international regulators and bodies EBA publishes annual report on supervisory convergence for 2024 The European Banking Authority (EBA) has issued its 2024 annual report on the convergence of supervisory practices across the EU. The paper outlines EBA’s initiatives to enhance consistency of supervision among Member States, spanning all...

Loan Market Association investment grade facilities agreement This commentary draws on the Loan Market Association (LMA)’s recommended LMA Multicurrency Term and Revolving Facilities Agreement that incorporates Term SOFR (the LMA facilities agreement). The LMA provides various precedent loan agreements for investment‑grade deals, and single‑currency forms may suit a particular transaction better—the commentary can nonetheless be applied in that context. The provisions in the LMA facilities agreement, and in the LMA’s other precedent forms, are drafted on the basis of a series of assumptions. It is essential to recognise these, as amendments will usually be required where any assumption does not hold true. For further detail on those assumptions, see Practice Note: Loan Market Association investment grade documentation. That Practice Note also outlines the range of LMA‑recommended investment‑grade facility agreements and indicates the circumstances in which each is appropriate. In addition, the LMA publishes recommended form facility agreements for specialist transactions, including leveraged, real estate, trade and developing markets transactions. For more on these, please refer to our...

This ‘How to’ guide offers a primer on drafting and negotiating a facility agreement for those starting out in lending transactions. It includes a table of useful precedents, explains how a facility agreement is organised, and flags key issues to consider when drafting and negotiating, alongside links to further materials. See also Practice Note: Introductory guide to lending, which sets out the facility agreement’s role within a loan transaction. For a deeper look at negotiating a facility agreement—covering the parties’ aims, analysis of the agreement’s structure and frequently negotiated clauses, plus common pitfalls—see Practice Note: Negotiation guide—facility agreement. Finding a precedent facility agreement The lender’s lawyers will typically, though not invariably, produce the first draft of the facility agreement. What kind of precedent is required? When choosing a suitable precedent facility agreement, it is vital to understand the nature of the loan, as that will dictate the precedent you should select. In particular, you will need to know: the type of facility involved, eg term...

This Agreement, dated [ • ] 20[ • ], is entered into between the following parties: Parties [ insert name of Borrower ], a company incorporated in England and Wales with registered number [ insert company number ], whose registered office is at [ insert address ] (the Borrower); and [ insert name of Lender ] of [ insert address ] (the Lender). Background (A) [ insert description of background to transaction ]. (B) The Lender has agreed to provide the Facility (as defined below) to the Borrower on the terms and conditions contained in this Agreement...

This Deed is made on [ insert day and month ] 20[ insert year ] Parties [ Insert name of Chargor ], being a company incorporated in England and Wales, with registered number [ insert company number ], and whose registered office is at [ insert address ] (the “ Chargor ”); and 1 [ Insert name of Security Agent ], acting as security agent and trustee for the Finance Parties pursuant to the terms and conditions set out in the [ Facilities Agreement OR Intercreditor Agreement OR Security Trust Deed ] (the “ Security Agent ”). Recitals: (A) The Finance Parties have consented to provide loan facilities subject to the terms and conditions set out in the Facilities Agreement (as defined below). (B) As a condition precedent to the loan facilities becoming available, the Chargor must execute this Deed for the purpose of granting security in favour of the Security Agent in relation to the Secured Obligations (as defined below)...

This Deed is entered into on [ insert day and month ] 20[ insert year ], as of that date Parties [ insert name of Assignor ], a company incorporated in England and Wales with company number [ insert company number ], whose registered office is at [ insert address ] (the Assignor); and [ insert name of Security Agent ], acting as security agent and trustee for the Finance Parties pursuant to the terms and conditions contained in the [ [ Facilities Agreement ] OR [ Intercreditor Agreement ] OR [ Security Trust Deed ] ] (the Security Agent). Recitals: (A) The Finance Parties have consented to provide the loan facilities, subject to the terms and conditions set out in the Facilities Agreement (as defined below). (B) A condition precedent to the availability of the loan facilities is that the Assignor enters into this Deed to provide security in favour of the Security Agent in respect of...