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Article
Publication date: 9 May 2016

Norman Mugarura

The purpose of this paper is to articulate the law relating to syndicated loan agreements and what legal experts and parties need to safeguard against inherent pitfalls in…

Abstract

Purpose

The purpose of this paper is to articulate the law relating to syndicated loan agreements and what legal experts and parties need to safeguard against inherent pitfalls in its usage and practice. The research design of this paper has two strands: an examination of generic issues relating syndicated loan agreements and the process; and the mechanisms for transferring proprietary rights and interests should parties want to do so.

Design/methodology/approach

The paper was written on the basis of evaluating primary and secondary data sources to gain insights into commercial experiences of harnessing syndicated loan facilities as an alternative form of raising finance for development projects. It has examined case law which reflects the law and practice of syndicated loan markets both in common and civil law jurisdictions. Particular attention has been paid to the credibility of source materials and its relevance to usage and practice of syndicated loan agreements. The core element of this methodology has been an evaluation of generic issues which underpin syndicated loan agreements, analysis of academic literature and evaluation of cases and policy documents. The paper has drawn examples in both common and civil jurisdictions to gain insights into the law which governs syndicated loan markets and its practical application. There has been an uptake in syndicated loan markets not only in United Kingdom but also globally. While there has been a growing body of literature on syndicated loan markets, mechanisms for transferring proprietary rights and interests of contractual parties have not been given proportionate attention. The paper addresses a gap in the law of syndicated loan markets and the varied ways in which they are harnessed in international commercial practice. It addresses existing gaps in the law and practice of syndicated loans, not only in the UK but also in other jurisdictions where examples have been drawn. The research design of this paper has two strands: an examination of generic issues relating loans and the process in which they are constituted as financial products; and the mechanisms for transferring proprietary rights and interests.

Findings

The findings underscore the fact that much as syndicated loans offer huge advantages to commercial parties, there are also intricacies which parties need to keep in mind and guard against. Like in other forms of commercial agreements, parties to a syndicated loan agreement have the power to nominate the governing law not necessarily from jurisdictions where they do business but as they may see fit. In practice, effective contractual terms in syndicated loans are to be applied slightly differently to other form of commercial agreements in English contract law. For example, representation and warranties are grouped together and constitute statements by the borrower, which the lender considers should be true at the inception of the loan agreement. As a syndicated loan involves the participation of many banks (obviously some foreign banks), there is the potential for conflict of laws. As such, arranging a syndicated loan should be governed by the relating to international commercial contracts to address the challenge posed by conflict of laws. This is essential to ensure proprietary transfer of rights in the asset are properly constituted and effective. The loan should be carefully structured to reflect important technical issues which relate to duties and obligation of contractual parties.

Research limitations/implications

This was largely a theoretical paper undertaken on the basis of evaluating primary and secondary data sources, some of which were not able to corroborate. It would have been better to corroborate some of the data sources used with financial institutions (which specialise in syndicate loans and related products) to mitigate the potential for bias the data used were generated.

Practical implications

It is important that legal practitioners and policy markers have access to requisite data on different types of loan markets not only in the UK but also other jurisdictions. One of the most important implication is that unlike bond markets (which are sought in response to an uptake in market risks), the foregoing environment tends to negatively correlate in syndicated loan markets. Lending institutions such as banks tend to be cautious when there are instabilities in the market as demonstrated in the aftermath of the recent global financial crisis (2010-2014). There is a converse relationship between loan markets and syndicated loans, which is explained by the fact that the higher the risks, the more cautious lenders (financial institutions) tend to be to safeguard against uncertainties of ending in an environment which is not conducive for business. Bonds on the other hand are sought as security by credit markets against inherent risks especially in times of economic uncertainties. This is why in the aftermath of the recent global financial crisis, banks were anxious and unwilling to lend not only to each other but also to small business for fear and to curtail potential market risks. It needs to be noted that just like in other forms of international commercial agreements, parties in syndicated loan agreements have autonomy to nominate the governing law of the agreement, not necessarily from jurisdictions where parties do business. Where parties have not nominated the governing law clause of syndicated loan contracts, rules of private international law such as characteristic performance of the contract will apply.

Social implications

There is a growing body of literature on syndicated loan markets, but one wonders why mechanisms for transferring proprietary rights and interests of contractual parties have not been written about as much. It is an important area but has somehow been overlooked by scholars on this subject. If the borrowers’ fails to keep up their repayments (default), it will have an adverse on loan markets and the economic stability which will in turn affects businesses, people and national governments.

Originality/value

The paper was written on the basis of evaluating primary and secondary data sources to gain insights into commercial experiences of harnessing syndicated loan facilities as an alternative form of raising finance for development projects. It has examined case law which reflects the law and practice of syndicated loan markets both in common and civil law jurisdictions. Particular attention has been paid to the credibility of source materials and its relevance to usage and practice of syndicated loan agreements. The core element of this methodology has been an evaluation of generic issues which underpin syndicated loan agreements, analysis of academic literature and evaluation of cases and policy documents. The paper has drawn examples in both common and civil jurisdictions to gain insights into the law which governs syndicated loan markets and its practical application.

Details

Journal of Financial Regulation and Compliance, vol. 24 no. 2
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 8 July 2019

Tola Amodu

The Immigration Act (2014) at Part 3 established a new regime with private landlords incurring penalties (and potentially criminal liability from 1 November 2016) if they…

Abstract

Purpose

The Immigration Act (2014) at Part 3 established a new regime with private landlords incurring penalties (and potentially criminal liability from 1 November 2016) if they allow a person disqualified, by reason of migration status, to reside in a property as their only or main home. Known colloquially as the “right to rent”, the provisions restrict access to accommodation and impose onerous duties on landlords to check tenants’ migration status. The purpose of this paper is to consider how a change in the emphasis of regulation introduced by the provisions, resulted in the coalescence of opposition by landlords and renters in a way that historically would have been unthinkable.

Design/methodology/approach

Using the lens of Foucault’s governmentality, it is possible to see how Government sought to shift the locus of control from itself to the landlord, which through its legislative and policy stance resulted in such fierce opposition as evidenced by the first instance challenge to the provisions in R (Joint Council for the Welfare of Immigrants) v SS for the Home Department [2019] EWHC 452 (Admin).

Findings

The focus of regulation introduced by the provisions resulted in the coalescence of opposition by landlords and renters in a way that historically would have been unthinkable. Landlords and renters are usually thought of as being in opposition, but not so here. This may offer hope for more productive regulatory outcomes where both parties work together. It may also suggest that encroaching on the notion of private rights and interests in law could result in counterproductive consequences.

Research limitations/implications

Unlike Foucault’s notion of surveillance and control, governmentality shifts the emphasis from a hierarchical conception of government to practices including self (imposed) governance – with here, the landlord being required to act as a proxy for border agents. This suggests that there may exist boundaries beyond which, in a given context, it might be unwise for Government to step without adverse consequences. Foucault’s ideas provide a starting point, but do not give us all of the answers.

Practical implications

The coalescence of opposing actors can be a significant force to challenge government given the extent of their knowledge of the given context. It may also suggest a route to a more collaborative form of regulation.

Originality/value

A novel theoretical take on an issue of concern raised by practitioners and interest groups alike.

Details

Journal of Property, Planning and Environmental Law, vol. 11 no. 2
Type: Research Article
ISSN: 2514-9407

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Article
Publication date: 1 November 1999

Charles Oppenheim and Margaret Turner

An investigation of what happens when fans take material related to popular TV science fiction/fantasy programmes without permission, give the copyright holder full…

Abstract

An investigation of what happens when fans take material related to popular TV science fiction/fantasy programmes without permission, give the copyright holder full credit, and use it to promote the show from which they have taken the material. The web sites relating to two TV series were chosen for study: Forever Knight and the X‐Files. A large number of owners of relevant fan sites were surveyed by questionnaire. The investigation showed that the approaches taken by the copyright holders in the two case studies differed quite markedly. Fox (X files) takes a harder line than Sony (Forever Knight) appear to have done. The issue of rights ownership is becoming increasingly important, especially with the advent of the Internet. Though considered by many to be something of a trivial area, fan activities have in fact been at the forefront of the copyright conflict taking place on the Web.

Details

Aslib Proceedings, vol. 51 no. 9
Type: Research Article
ISSN: 0001-253X

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Article
Publication date: 1 April 2003

Georgios I. Zekos

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination…

Abstract

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

Details

Managerial Law, vol. 45 no. 1/2
Type: Research Article
ISSN: 0309-0558

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Book part
Publication date: 15 July 2009

Ross B. Emmett and Kenneth C. Wenzer

Dublin, Wednesday, 1 a.m., Aug. 9, 1882.

Abstract

Dublin, Wednesday, 1 a.m., Aug. 9, 1882.

Details

Henry George, the Transatlantic Irish, and their Times
Type: Book
ISBN: 978-1-84855-658-4

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Article
Publication date: 1 November 2003

R A Spinello

According to its supporters open source software is more secure and reliable than proprietary code, and even tends to foster more innovation. Its technical superiority can…

Abstract

According to its supporters open source software is more secure and reliable than proprietary code, and even tends to foster more innovation. Its technical superiority can be linked to the ongoing peer review process which typifies the open source model. In addition, programs such as Linux offer a potential challenge to the hegemony of Microsoft. Open source holds out the possibility of restraining platform leaders such as Microsoft from acting opportunistically. Some even argue that the open source code model is ethically superior to the proprietary model because of its transparency. Given these economic and social benefits, should government policy makers intervene, by tilting the playing field to open source programs? Would such government intervention truly be welfare‐enhancing? Before answering that question we note that some of the presumed technical and economic benefits of open source software are open to question. At the same time, the claims of moral superiority or social desirability are inflated and discount incentives necessary for software development. But even if this software were technically and morally superior, there is still no basis for government intervention. Our position is simple: the invisible hand of the market and not the visible hand of government should decide the fate of open source code. There is no identifiable market failure for the government to fix nor is there any plausible policy justification for giving open source software preferential treatment.

Details

Journal of Information, Communication and Ethics in Society, vol. 1 no. 4
Type: Research Article
ISSN: 1477-996X

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Book part
Publication date: 15 July 2009

Ross B. Emmett and Kenneth C. Wenzer

Our Dublin correspondent telegraphed last night:

Abstract

Our Dublin correspondent telegraphed last night:

Details

Henry George, the Transatlantic Irish, and their Times
Type: Book
ISBN: 978-1-84855-658-4

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Article
Publication date: 1 June 1983

J.R. Carby‐Hall

The doctrine of illegality in the law of contract generally is complex. Furthermore, a great deal of it is not directly relevant to employment law. Any discussion on the…

Abstract

The doctrine of illegality in the law of contract generally is complex. Furthermore, a great deal of it is not directly relevant to employment law. Any discussion on the doctrine of illegality in the law of contract generally would therefore be irrelevant in a work treating solely illegality of the contract of employment. Cases concerning aspects of illegality relating to contracts of employment have at times come before industrial tribunals and the courts. It is therefore proposed to limit the discussion to those aspects which concern solely contracts of employment. For a reader reading on the subject the reader is referred to the standard textbooks.

Details

Managerial Law, vol. 25 no. 6
Type: Research Article
ISSN: 0309-0558

Abstract

Details

Documents from the History of Economic Thought
Type: Book
ISBN: 978-0-7623-1423-2

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Article
Publication date: 1 January 2004

Susan S. Krawczyk

During 2003, compensation practices for the retail sale of mutual funds came under fire. Recent revelations about failures in the processing of mutual fund breakpoints had…

Abstract

During 2003, compensation practices for the retail sale of mutual funds came under fire. Recent revelations about failures in the processing of mutual fund breakpoints had triggered a more in‐depth investigation into mutual fund marketing and compensation practice by securities regulators, Congress, and the states. This article focuses on the regulation of sales compensation practices primarily as it affects a broker‐dealer selling mutual funds in the retail market. It addresses the regulatory framework for three key compensation practices: (1) the use of non‐cash compensation in connection with mutual fund sales; (2) marketing and compensation arrangements providing enhanced compensation to a selling firm as well as to its sales representatives for the promotion of certain fund securities over others, such as proprietary funds over non‐proprietary funds, preferred funds over non‐preferred funds, and Class B shares over Class A shares; and (3) the use of commissions for mutual fund portfolio trades as an additional source of selling compensation for selling firms, a practice sometimes referred to as ”directed brokerage.“

Details

Journal of Investment Compliance, vol. 4 no. 4
Type: Research Article
ISSN: 1528-5812

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