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The photomultiplier handbook 1st Edition A.G. Wright
Global Financial Markets is a series of practical guides to the latest financial market tools, techniques and strategies. Written for practitioners across a range of disciplines it provides comprehensive but practical coverage of key topics in finance covering strategy, markets, financial products, tools and techniques and their implementation. This series will appeal to a broad readership, from new entrants to experienced practitioners across the financial services industry, including areas such as institutional investment; financial derivatives; investment strategy; private banking; risk management; corporate finance and M&A, financial accounting and governance, and many more.
Sue Wright
The International Loan Documentation Handbook
Sue Wright London, UK
Global Financial Markets
ISBN 978-3-031-38488-2 ISBN 978-3-031-38489-9 (eBook) https://doi.org/10.1007/978-3-031-38489-9
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For Dave, Amy, Leo, Hilary and Claude
Preface to the Third Edition
This third edition of The International Loan Documentation Handbook was largely prompted by the abolition of Libor and the fundamental changes to loan documentation which ensued. After a period of rapid development during the transition away from Libor, market practices for documentation of loans based on the new interest rate methodologies have started to emerge and the Loan Market Association now publishes a library of recommended forms of loan documentation appropriate for use with either (or both) term rates or compounded rates of interest based on risk free rates. This book provides a comprehensive overview of the concepts behind the interest rate provisions, an explanation of the mechanisms by which the raw data on risk free rates is converted into the interest rate charged to the borrower, and a clause-by-clause explanation of the drafting.
The book has also been updated to reflect the many other changes in the documentation and practice of international lending which have taken place since the second edition was published in 2014. These include new case law, accounting changes, Brexit, rise in ESG lending and a challenging commercial environment as a result of COVID, sanctions on Russia, rising geopolitical tensions, rising energy costs and inflation.
Thanks, as always, to the Loan Market Association, for giving me permission to use their documentation for the purpose of this book, and to the many delegates on my loan courses over the years, for their questions and inspiration.
London, UK Sue Wright
Preface to the Second Edition
This second edition of The International Loan Documentation Handbook was prompted by the major changes in the documentation and practice of loan documentation that have occurred since the first edition was published in 2005.
The financial crisis of 2007–2008, and the increased regulation and litigation which followed it, gave rise to a host of new issues as well as some useful judicial decisions on the wording of the documents. Interest rates, in particular, became the subject of much discussion both as a result of concerns over the accuracy of LIBOR as a benchmark rate and as a result of changes in bank funding arrangements following the crisis. This has led to the substantial revision of the sections in the book dealing with interest.
There are also new sections on defaulting lenders; commodification of debt; the Euro crisis; FATCA; sanctions and anti-corruption legislation; and on the impact of recent court decisions on the loan agreement wording. I have also taken the opportunity to expand the sections of the book dealing with financial covenants and with other undertakings other than those contained in the investment grade LMA loan agreement.
As ever my thanks go to the many delegates who have attended my loan documentation courses over the years. Their questions and comments have been invaluable in inspiring this book in the first place as well as in highlighting contentious issues. Thanks also are due to the partners, staff and clients at Norton Rose, where I gained my practical experience in international finance.
Sue Wright
Acknowledgements
This book was inspired by the questions and comments of the many delegates who have attended my loan documentation courses over the years. Their questions, often difficult and insightful, and based on their widely differing backgrounds and areas of expertise, have been indispensable in helping to widen my own perspective on the documentation, and in highlighting issues of concern. My thanks to those many delegates who have inspired me to investigate those issues which are discussed in this book. My thanks also go to the partners, staff and clients at Norton Rose, where I obtained my practical experience of international finance, without which this book would have been impossible. Thanks are also due to those who have been kind enough to spare their valuable time to review parts of the manuscript of this book at its various stages of development, and to provide comments and suggestions. In particular, I would like to thank Staffan Avenius (Nordea Bank), Anne-Marie Godfrey (Deacons), Kenneth Gray (Norton Rose), Alexey Ievlev (ING Bank), Jonathan Porteous (Stevens and Bolton LLP), Richard Powell (Mundays) and Paul Rogerson (ABN Amro) for their kind assistance. The comments, information and support provided have been enormously helpful in getting this book from conception to completion. Finally, of course, I would like to thank the Loan Market Association for their permission to use their primary form documents in this text, and the Dutch Bankers Association, for consenting to the use of their ‘parallel debt’ wording.
PS To Leo, thanks too for your comments, which will be included if a humorous version of this book is ever commissioned.
List of Statutes and Conventions
s474(1) Companies Act 2006
2011
Overseas Companies (Execution of Documents and Registration of Charges) (Amendments) Regulations 2011 (SI 2011/ 2194)
2016
Statutory Auditors and Third Country Auditors Regulation 2016 (SI 2016/649)
2017
Money Laundering, Terrorist Financing and Transfer of Funds (information on the Payer) (regulations 2017 (SI 2017/692) (as amended)) 270
The Law Applicable to Contractual Obligations and Non Contractual Obligations (Amendments, etc.) (EU Exit) Regulations 2019
Protecting against the Effects of Extraterritorial Application of Third Country Legislation (Amendment) (EU Exit) Regulations 2020 (SI 2020/1660)
EU Regulations and Directives
1996
Blocking Regulation 2271/96 66, 511
2007
Rome II 864/2007 414
2008
Rome I 593/2008 532
2013
Credit Ratings Agencies Regulation 462/ 2013 127
Capital Requirements Regulation 575/2013 (‘CRRI’) 207
Fourth Capital Requirements Directive 36/2013 (‘CRDIV’) 207, 208, 516
Pending—expected to become effective in January 2025 209, 211, 524
Third Capital Requirements Regulation (‘CRRIII’) 206–208
Sixth Capital Requirements Directive (‘CRDVI’) 206–208, 516
International Conventions
Brussels Convention of 1926 Relating to Maritime Liens and Mortgages 495
Geneva Convention of 1948 on the International Recognition of Rights in Aircraft 495
United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958—the ‘New York Convention’ 415 Hague Convention on the law applicable to trusts and on their recognition 1985 367 Cape Town Convention on International Interests in Mobile Equipment
Hague Convention on Choice of Court Agreements 2015
Employee Retirement Income Security Act 1974 (“ERISA”) 310, 519
L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235 464
Lester v Garland (1808) 15 Ves 248 113
Lombard North Central Plc v European Skyjets Ltd [2022] EWHC 728 346, 405
Lordsvale Finance plc v Bank of Zambia (1996) QB 752 177
Mauritius Commercial Bank Ltd v Hestia Holdings [2013] EWHC 1328 (Comm) 416
Maxted v Investec Bank Plc [2017] EWHC 1997 (Ch) 221
McGuinness v Norwich and Peterborough Building Society [2011] EWCA Civ 1286 216
Re Mytravel Group [2004] EWCA Civ 1734 308
National Westminster Bank Plc v Spectrum Plus Limited (2005) 3
W.L.R. 58 488
NML Capital v Argentina (2013 US case) 252
North Shore Ventures Ltd v Anstead Holdings (2011) EWCA Civ 230 221
ParkingEye see Cavendish Square 177
Re PFTZM Ltd [1995] BCC 280 260
Red Sea Tankers v Papachristidis [1997] 2 Lloyd’s Rep. 547 389
Revlon case—see Citibank 65
Rolled Steel Products (Holdings) Ltd v British Steel Corp and others (1986) Ch 246 504
Rothschild case (Cour de cassation in Mme X v Rothschild Civil Division 1, 26 September 2012, 11–26022 416
Re SSSL Realisations (2002) Ltd [2006] EWCA Civ 7 223
Strategic Value Master Fund Ltd v Ideal Standard International Acquisition S.A.R.L. & Ors [2011] EWHC 171 (Ch) 351
Sumitomo Bank v Banque Bruxelles Lambert (1997) 1 Lloyds Law Reports 487 383
Tele2 International Card Co SA v Post Office (2009) EWCA Civ 9 404
Telefonnaya Kompaniya (RTK) v Sony Ericsson Mobile Communication Rus (Russian case in 2012) 415 Thomas v Thomas (1842) 2 QB 851 476
Tolhurst v Associated Portland Cement Manufacturers (1900) Ltd (1903) AC 414 361
Torre Asset Funding Ltd v The Royal Bank of Scotland (2013) EWHC 2670 Ch 384
Triodos Bank v Dobbs (2005) EWCA Civ 630 221
Twinsectra Ltd v Yardley [2002] UKHL 12 145
Ultraframe v Fielding [2005] EWHC 1638 (Ch) 260
White v Davenham Trust Ltd (2011) EWCA Civ 747 221
White Hawthorne llc v Argentina 16-cv-1042 (TPG)-US case 253
Wulff v Jay (1871–72) LR 7 QB 756 220
Clause
Clause
Clause
Clause
Clause
Clause
Clauses
6.3
Clauses 6.5 and 6.6
Clause 11.1 Calculation of interest—Term Rate Loans and 11.2
Calculation of interest—Compounded Rate Loans
Clause 11.3 Payment of interest
Clause 11.4 Default
Clause 11.5 Notifications
Clause 12: Interest Periods
Clause
Clause 12.2
Clause 12.3
Clause 12.4 Consolidation and division of Facility A Loans
Clause 13: Changes to the Calculation of Interest
Clauses 13.1 and 13.2 Interest calculation if no Primary Term Rate and Interest calculation if no RFR or Central Bank Rate
Clause 13.3 Market disruption and 13.4 Cost of funds
Clause 13.5 Break costs
Clause 14: Fees
Clause 15: Tax Gross-Up and Indemnities Section 1—Introduction
2.
3.
4.
5.
6.
Clause
Clause 15.2
Clause 15.4
Clause 15.8 FATCA Information and 15.9 FATCA Deduction
Clause 16: Increased Costs—Section 1—Introduction
1. Who issues the Basel regulations?
2. What are the Basel Accords there for?
3. The Basel Accords
Clause 16: Increased Costs—Section 2—The Clause
Clause 16.1
Clause 16.2
Clause 16.3
Clause
Clause 17.1 Currency indemnity
Clause
Clause
3. Qualifications
4. Cumulative
Clause 22: Information Undertakings
Clause 22.1 Financial statements
Clause 22.2 Compliance Certificate
Clause 22.3 Requirements as to financial statements
Clause 22.4 Information: miscellaneous
Clause 22.5 Notification of default
Clause 22.6 Direct electronic delivery by company
Clause 22.7 ‘Know Your Customer’ checks
Clause 23: Financial Covenants
1. Purpose
2. Which aspects of the borrower’s financial condition should be tested?
3. At which level of the Group should the tests be run?
4. In respect of what periods should the tests be run?
5. What should the consequences of breach of a ratio be?
6. Can a breach be cured?
7. How should the words used in the tests be defined?
Clause 24: General Undertakings—Section 1—The LMA
Clause
Clause
Clause 24: General Undertakings—Section 2—Other Common Undertakings
1. Authorizations and Compliance with Laws
2. Restrictions on business focus
3. Restrictions on dealing with assets and security
4. Restrictions on movements of cash—cash
5. Restrictions on movement of cash—cash
6. Information
7. Granting powers
8. Reflecting
9. Undertakings relating
10. Miscellaneous
Clause 25: Events of Default—Section 1—Introduction
1. Purpose
2.
Clause 26.8 Copy of Transfer Certificate, Assignment
Clause
Clause
Clause
Clause
Clause
Clause
Clause
Clause
Clause
Clause
Clause
Clause
Clause
Clause
Clause
Clause
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Note
Heavy
Misdeed
Quintessence
Glide
Reason
Web-footed birds
Wonder
Lamentation
Fabricated
VERTICAL
Mesial plane
Came out
Make amends
Turret
Pleased expression
Debate Wager
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School master
Before Large nails
Part of “to be”
Truck
Second cutting of hay
Provided that Period of time
Strife
Drive back
Shelters
[Contents]
Artist’s
Enclosures
Sleight
Religious ceremony
Wander
A tree
Pastries
Efface
Odor
Digits
To comply
Sediment
Knob
To ensnare
Web-footed bird
Saucy
A grain
Be indebted
A BLACK BEAUTY
By P. B. G
Anyone who geotsch this one is good. This one shows how hard it is to solve a puzzle with many unkeyed letters.
To become insolvent
A long-legged bird
Presage A bruise Not working
What Cautious
In bed Mother To lick up
To waste away
A sticky substance
To silence
Encircled
Since Beast of burden
Article
Exclamation
Guided
Liquid juice of plants
Assent
Everything To grasp
VERTICAL
Clamp
Also
First woman A drink
Organ of body
Dissent
Exist
A beam
To fall behind To squander
A tree Viper An automobile
A card
Preposition
A distance
Ireland Exclamation A step
Measure of time
Remunerated To rub off A vegetable
Combustible material
Part of “to be” Vulgar She Point of a pen Aged Myself Past An animal After
Sheltered side To snare An urn-like vessel
Song
Close to A rodent Cave
Very old women
To make a mistake
Eaten
Female horse
To go ahead
To do as asked To ring a bell Upon Perform To astonish
A covering on an automobile Speed
A person who dresses fastidiously
Too Exclamation of pain
To exist Coy
Part of “to be”
A digit
Above
Sound made by a clock
A neck ornament
To gain by toil
Insane
Sheltered side
A liquor To catch
3.141592
Backwards
A GRAND OLD PUZZLE
By S L. F
There are some grand old words in this puzzle, and the interlock is something grand also.
Impenetrably
Viscous
Chalky chemical substance
Fracas
Preposition
Annoy
Rhymed composition
Live Natural Pendent
VERTICAL
One Imitated
Trimming
Suffice Journey
Patent
Eschew Touch
Faith Wanting A drug
Be indisposed
Matchless
Liquid refreshment
Malady of the brain
Period of time
Dropsy
Part of verb “to be”
Inscription-bearing stone
Sways
Guided
Back tooth
Mohammedan world
Mode of scenic representation
Near Slid
Take inconsiderately
Affirmative
Titanic Used in golf
Basket
Negative
Sound Headdress
Beat
Pertaining to sounds
Span of time
Single
Health resort
Beast of burden
Poem
Scrutinize
[Contents]
A QUADRIPUNTAL ASTEROID
By P
A brilliant construction, comprising clever interlocking combined with symmetry of design. Such a combination is difficult and extremely rare. To obtain a picture such as this four-pointed star makes a real treasure of the puzzle.
Wise
Pertaining
Location
Go in Unclose
Faithful
Tract on the earth I refuse
Belonging to me
Paradise Exists
Males
Proportion; rate
VERTICAL
Knock lightly
Inward
Hireling
A fermented liquor
Theme
Exist, in the first person
Injured
Unit
Autocratically controlled
Toward
Termination
Foaming
Goddess of fecundity
Entreaty
To make less sour
Musical drama
Lean
Different
Low, swampy land
To consume by using Illimitable period of time
Odor
To break into fragments
Fiscal agent
Venomous little snake
Natural combination of metals
Rabble
A fruit
The life principle
Cowshed
A period of time
Angry
Rodents
Disrupted
A tool
You
Hard fat
Under-officers of churches
Itinerary
Long
Exhausted
“The sharpest sighted spirit of all in heaven” A parent’s brother
An ant
In, on, near or by Plunge
From; out of At no time
Twisted strand
Founder and queen of Carthage
Flexible; dexterous
Small mountain lake
Single Foes
Behold
Ourselves Seats
Chinese coins
Plate bearing the Eucharist
Leaven
Contagious skin disease
To lose remembrance of Crude
Asteraceous plant having small white blossoms
Maiden loved by Zeus
Companion; comrade Hill in Jerusalem
Exclamation Fop (slang)
Landing place with ascending stairs, in India
Timber and shade tree
A small insect Before Distant Parent Bovine quadruped The other parent
A QUADRUPLEX QUIDDITY
By P
P
U
A truly marvelous study in four-letter words, with some notably lengthy side-interlocks. The unknown author is to be congratulated.
