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Oxford Law Citator
Contents
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McKnight and Zakrzewski on The Law of Loan Agreements and Syndicated Lending edited by Zakrzewski, Rafal; Fuller, Geoffrey
Preliminary Material
Preface
Table of Contents
Table of Cases
Australia
Canada
Hong Kong
New Zealand
Singapore
United Kingdom
United States
Table of Legislation
European Union
Regulations
Directives
International
United Kingdom
Statutes
Statutory Instruments
Codes and Handbooks
United States
List of Editors
Main Text
1 Introductory Matters
Preliminary Material
1.1 Preliminary Points
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.2 Contractual Issues
1.09
1.2.1 Some contractual prerequisites
1.10
1.11
1.12
1.13
1.2.2 Corporate entities and other legal persons
1.14
1.2.3 Intention to contract and certainty of agreement
1.15
1.16
1.17
1.18
1.2.3.1 Implication of terms
1.19
1.20
1.21
1.22
1.2.3.2 Filling gaps—summary of principles
1.23
1.24
1.25
1.26
1.2.4 Good faith and fairness
1.27
1.28
1.29
1.30
1.31
1.2.5 The parties to a contract: mistake
1.32
1.2.6 Mistake as to the subject matter of a contract
1.33
1.2.7 Privity of contract
1.34
1.35
1.36
1.37
1.38
1.39
1.2.8 The interpretation of a contract
1.40
1.41
1.42
1.43
1.44
1.45
1.46
1.47
1.48
1.49
1.50
1.2.9 Contractual discretions
1.51
1.52
1.53
1.54
1.55
1.56
1.57
1.58
1.59
1.2.10 Best endeavours and reasonable endeavours
1.60
1.61
1.62
1.63
1.64
1.3 Illegality
1.65
1.66
1.3.1 Statutory illegality
1.67
1.68
1.69
1.70
1.71
1.3.2 Unlawfulness at common law
1.72
1.73
1.74
1.75
1.76
1.77
1.78
1.3.3 Passing of title under an unlawful transaction
1.79
1.3.4 Restitutionary claims
1.80
1.3.5 Pleadings and evidence concerning illegality
1.81
1.4 Frustration of Contract and Force Majeure Clauses
1.82
1.83
1.84
1.85
1.86
1.87
1.5 Enforcement and Recovery upon Breach of Contract
1.88
1.5.1 The general position
1.89
1.90
1.91
1.92
1.93
1.94
1.95
1.96
1.5.2 Enforcement remedies
1.97
1.5.3 Liquidated claims
1.98
1.5.4 Part payment
1.99
1.100
1.101
1.5.5 Promissory estoppel
1.102
2 Loan Facilities
Preliminary Material
2.1 Introduction
2.01
2.02
2.03
2.04
2.2 Term Sheets
2.05
2.06
2.07
2.08
2.3 The Overall Structure and Contents of a Loan Facility Agreement
2.09
2.10
2.11
2.12
2.13
2.14
2.15
2.16
2.17
2.18
2.19
2.20
2.21
2.22
2.4 The Interpretative Provisions
2.23
2.4.1 Definitions
2.24
2.4.2 Interpretation
2.25
2.26
2.27
2.5 The Description and Purpose of the Facility
2.28
2.29
2.6 The Financial and Operative Provisions
2.30
2.6.1 Sources of funding for bank lenders
2.31
2.32
2.33
2.6.2 Libor reform and replacement
2.34
2.35
2.36
2.37
2.38
2.39
2.6.3 Zero and minimum floors on benchmark rates
2.40
2.6.4 Interbank funding conventions
2.41
2.42
2.43
2.44
2.45
2.46
2.6.5 Funding rollover
2.47
2.6.6 Market disruption
2.48
2.7 Borrowing under the Facility
2.49
2.50
2.51
2.52
2.53
2.8 A Wrongful Refusal to Lend
2.54
2.8.1 Repudiatory breach
2.55
2.8.2 The obligation to repay after termination
2.56
2.57
2.58
2.59
2.60
2.8.3 Set-off claim
2.61
2.8.4 Damages
2.62
2.63
2.64
2.65
2.66
2.67
2.68
2.69
2.70
2.9 Conditions Precedent
2.71
2.9.1 The list
2.72
2.9.2 Conditions precedent and conditions subsequent
2.73
2.74
2.75
2.76
2.77
2.78
2.79
2.80
2.81
2.82
2.9.3 Role of the borrower
2.83
2.10 Repayment
2.10.1 Limited and non-recourse lending
2.84
2.10.2 Repayment on demand
2.85
2.86
2.87
2.88
2.10.3 Term facilities
2.89
2.10.4 No agreed date for repayment
2.90
2.10.5 Clogs on the equity of redemption
2.91
2.10.6 Early repayment
2.92
2.93
2.11 Interest
2.94
2.95
2.11.1 Agreement to pay interest
2.96
2.11.2 Rates of interest
2.97
2.11.3 Interest as a share of profits
2.98
2.11.4 Interest for default in payment
2.99
2.100
2.101
2.102
2.11.5 Interest in equity
2.103
2.11.6 Compound interest
2.104
2.12 Penalties
2.105
2.106
2.107
2.108
2.109
2.110
2.111
2.112
2.113
2.114
2.115
2.13 Payments under a Loan Facility Agreement
2.116
2.13.1 Methods of payment
2.117
2.118
2.13.2 Effectiveness of payment
2.119
2.13.3 Receipt of payment
2.120
2.13.4 Drafting of payments provisions
2.121
2.13.5 Unlawfulness
2.122
2.123
2.13.6 Conclusive evidence clauses
2.124
2.125
2.13.7 Set-off provisions
2.126
2.13.8 Payments made by mistake
2.127
2.128
2.14 Protecting the Lender’s Financial Position and Its Rate of Return
2.129
2.130
2.14.1 Increased costs
2.131
2.132
2.133
2.14.2 Mandatory costs
2.134
2.14.3 Third party issues
2.135
2.136
2.137
2.14.4 Grossing Up clauses
2.138
2.139
2.140
2.141
2.14.5 Tax indemnity
2.142
2.14.6 Other indemnity provisions
2.143
2.15 The Monitoring and Minding Provisions in a Loan Facility Agreement
2.144
2.145
2.146
2.147
2.148
2.16 Representations and Warranties
2.16.1 Preliminary observations
2.149
2.150
2.151
2.152
2.16.2 Types of provision
2.153
2.154
2.155
2.156
2.16.3 Negotiating points
2.157
2.17 Covenants and Undertakings
2.17.1 Preliminary observations
2.158
2.159
2.160
2.17.2 Shadow directors
2.161
2.162
2.163
2.164
2.165
2.166
2.17.3 Information undertakings
2.167
2.17.4 Financial covenants
2.168
2.169
2.170
2.171
2.172
2.173
2.17.5 Other covenants and undertakings
2.174
2.17.6 Maintenance of business
2.175
2.17.7 Ranking—the pari passu clause
2.176
2.177
2.178
2.17.8 Negative pledge and disposals of assets
2.179
2.180
2.181
2.182
2.183
2.184
2.18 Events of Default and Acceleration
2.185
2.186
2.187
2.188
2.18.1 The events
2.189
2.18.2 Cross-default
2.190
2.191
2.192
2.193
2.194
2.18.3 Material adverse change
2.195
2.196
2.197
2.198
2.18.4 Construction of the events of default clause
2.199
2.200
2.201
2.202
2.203
2.204
2.18.5 An invalid declaration of default
2.205
2.206
2.207
2.208
3 Syndicated Lending
Preliminary Material
3.1 Introduction
3.01
3.02
3.03
3.04
3.2 The Obligations and Rights of the Lenders and the Relationship between Them
3.2.1 The dichotomy
3.05
3.06
3.2.2 Pari passu distribution and the sharing clause
3.07
3.08
3.09
3.10
3.2.3 Voting and decision-making by lenders
3.11
3.12
3.13
3.14
3.15
3.16
3.17
3.18
3.2.3.1 Constraints on the majority’s power to bind the minority
3.19
3.20
3.21
3.22
3.23
3.24
3.25
3.2.4 Partnership
3.26
3.27
3.28
3.29
3.30
3.31
3.32
3.33
3.34
3.2.5 Collective investment schemes
3.35
3.36
3.37
3.38
3.39
3.40
3.41
3.3 Arrangement of the Facility by the Arranger
3.42
3.3.1 The mandate
3.43
3.3.1.1 Market flex provisions
3.44
3.45
3.3.2 The role of the arranger
3.46
3.47
3.48
3.49
3.50
3.4 Areas of Risk to the Arranger
3.4.1 A claim by the borrower
3.51
3.4.2 Claims by the syndicate members
3.52
3.53
3.54
3.4.3 A claim in the tort of negligence
3.55
3.56
3.4.3.1 The existence of a duty of care
3.57
3.58
3.59
3.60
3.61
3.62
3.63
3.64
3.65
3.66
3.4.3.2 The scope of the duty
3.67
3.68
3.69
3.4.3.3 Reasonable care
3.70
3.4.3.4 Reasonable reliance
3.71
3.72
3.4.3.5 Causation
3.73
3.74
3.75
3.4.3.6 Foreseeable loss
3.76
3.4.4 The position of the arranger in an action in negligence
3.77
3.4.4.1 A wide duty of care
3.78
3.79
3.80
3.81
3.82
3.4.4.2 A limited duty of care
3.83
3.84
3.85
3.86
3.87
3.88
3.4.5 A claim in the tort of deceit
3.89
3.90
3.91
3.92
3.93
3.4.6 A claim under section 2(1) of the Misrepresentation Act 1967
3.94
3.95
3.96
3.97
3.98
3.99
3.100
3.101
3.102
3.103
3.4.7 A claim under section 2(2) of the Misrepresentation Act 1967
3.104
3.105
3.4.8 A claim for breach of fiduciary duty
3.106
3.107
3.108
3.109
3.4.9 Contributory negligence
3.110
3.111
3.112
3.5 Protecting the Arranger
3.113
3.5.1 The means of protection
3.114
3.115
3.116
3.5.2 Construction of the provisions
3.117
3.118
3.119
3.120
3.121
3.122
3.5.3 Legislative limitations upon exclusions or restrictions of liability or for damages
3.123
3.5.4 The Unfair Contract Terms Act 1977
3.124
3.125
3.126
3.5.4.1 Liability in negligence
3.127
3.128
3.129
3.130
3.131
3.132
3.5.4.2 Liability arising in contract
3.133
3.134
3.135
3.136
3.137
3.5.4.3 The requirement of reasonableness
3.138
3.139
3.140
3.141
3.142
3.143
3.144
3.145
3.146
3.147
3.148
3.149
3.150
3.151
3.5.5 Section 3 of the Misrepresentation Act 1967
3.152
3.153
3.154
3.155
3.156
3.6 The Agent
3.6.1 The appointment, role, duties, and powers of the agent
3.157
3.158
3.159
3.6.2 Areas of risk to the agent
3.160
3.6.2.1 Fiduciary duty
3.161
3.162
3.163
3.164
3.165
3.166
3.167
3.6.2.2 Contractual duties
3.168
3.169
3.170
3.6.2.3 Tortious duties
3.171
3.172
3.173
3.174
3.6.3 Protecting the agent
3.175
3.176
3.177
3.178
3.179
3.180
3.181
3.182
3.183
3.184
3.185
3.186
3.6.4 The Unfair Contract Terms Act
3.187
4 Loan Transfers
Preliminary Material
4.1 Introduction
4.01
4.02
4.03
4.04
4.1.1 Reasons for a transfer
4.05
4.06
4.07
4.08
4.09
4.10
4.11
4.12
4.1.2 Benefits to the transferee
4.13
4.1.3 Effectiveness of the transfer
4.14
4.1.4 Chapter plan
4.15
4.2 Conflict of Laws Issues
4.2.1 Introduction
4.16
4.17
4.18
4.2.2 Novation v assignment
4.19
4.2.3 Characterisation
4.20
4.2.4 Article 14 of Rome I
4.21
4.22
4.2.5 The effect of Article 14
4.23
4.24
4.25
4.26
4.2.6 Article 14(2)
4.27
4.28
4.29
4.2.7 Priorities
4.30
4.31
4.32
4.2.8 Disposition other than by way of notified assignment
4.33
4.34
4.35
4.36
4.2.9 The common law approach and the lex situs
4.37
4.38
4.39
4.40
4.41
4.3 The Banker’s Obligation of Confidence
4.42
4.43
4.44
4.4 The Methods of Transfer under English Law
4.45
4.46
4.5 Assignment
4.47
4.48
4.5.1 Absolute or legal assignment
4.49
4.50
4.51
4.52
4.5.2 Equitable assignment
4.53
4.54
4.55
4.5.3 Future property
4.56
4.57
4.58
4.6 Declaration of Trust
4.59
4.7 Novation
4.60
4.61
4.62
4.63
4.64
4.65
4.66
4.67
4.7.1 Syndicated facilities
4.68
4.69
4.70
4.71
4.8 Sub-participation
4.72
4.73
4.74
4.75
4.76
4.9 Common Issues Concerning Assignments
4.77
4.9.1 Rights v obligations
4.78
4.9.2 Rights that are personal to the assignor
4.79
4.80
4.9.3 Contractual restrictions upon dealing
4.81
4.82
4.83
4.84
4.85
4.86
4.87
4.88
4.89
4.90
4.91
4.92
4.93
4.94
4.9.3.1 The effect of a contractual restriction
4.95
4.96
4.97
4.98
4.9.3.2 Where the debtor’s consent may not be unreasonably withheld
4.99
4.100
4.101
4.9.4 Negative pledges and anti-disposal provisions in third party contracts
4.102
4.103
4.104
4.9.5 The debtor’s rights of set-off
4.105
4.106
4.107
4.108
4.109
4.9.5.1 Legal rights of set-off
4.110
4.9.5.2 Equitable transaction set-off
4.111
4.9.5.3 Successive assignments
4.112
4.9.5.4 Direct counter-claims against the assignee
4.113
4.9.5.5 Claims that arise against the assignor after the payment of the debt
4.114
4.9.6 Priorities
4.115
4.116
4.117
4.9.6.1 The basic rule
4.118
4.9.6.2 The rule in Dearle v Hall
4.119
4.120
4.121
4.122
4.9.6.3 Notice
4.123
4.124
4.125
4.126
4.9.6.4 Constructive notice
4.127
4.128
4.129
4.9.6.5 Further advances
4.130
4.131
4.9.7 The risk of re-characterisation
4.132
4.133
4.134
4.9.7.1 The bases for challenge
4.135
4.9.7.2 The equity of redemption
4.136
4.9.7.3 The commercial characteristics of the transaction
4.137
4.138
4.9.7.4 The traditional approach of the courts
4.139
4.140
4.141
4.142
4.143
4.144
4.145
4.146
4.147
4.9.7.5 A change in judicial approach
4.148
4.149
4.150
Further Material
Index
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Table of Legislation
Rafal Zakrzewski, Geoffrey Fuller
From:
McKnight and Zakrzewski on The Law of Loan Agreements and Syndicated Lending
Edited By: Rafal Zakrzewski, Geoffrey Fuller
Content type:
Book content
Product:
Financial Law [FBL]
Published in print:
07 February 2019
ISBN:
9780198799948
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