For many, the immediate focus at the moment will be the LIBOR transition. With the FCA formally announcing on 5 March the formal cessation dates for certain LIBOR benchmarks and the non-representativeness of others, we discuss some of the trends and challenges that we are seeing for lenders as they move to risk-free rates.
In the longer term, the finance industry has a crucial part to play in funding the transition to a net zero economy. We look beyond the regulations, to the transactional considerations that participants in UK green/sustainable financings should be taking into account.
We also throw a spotlight on a source of finance that has come to the fore over the past year, as businesses navigating the effects of the pandemic look to unlock working capital: asset-based finance and receivables financing.
We hope you enjoy these Insights. If you would like to discuss any of the topics covered, please speak to one of the experts listed below or your usual Osborne Clarke contact.
LIBOR transition update: early trends and hedging challenges
With the recent announcement of the FCA mentioned above, the need to transition to alternative benchmark rates continues to gather pace.
In this Insight, we examine some of the early trends that are emerging on the supply side of the loan markets, we consider some potential challenges that remain to be resolved in how loan and accompanying hedging products transition in tandem, and we take a look at the potential impact of the publication of forward-looking SONIA term rates by ICE Benchmark Administration and Refinitiv.
Asset based lending and receivables financing
With lockdowns forcing many businesses to cease or radically alter their trading, Covid-19 has had a particular impact on businesses' working capital requirements. It has also called into focus the flexibility which asset-based lending and receivables finance products can offer as a potential working capital solution.
In this Insight, we consider the benefits that an asset-based lending or receivables financing product can offer and whether the balance can be struck between operational controls and providing the borrower with comfort as to ongoing availability
Funding the transition to a low carbon future: beyond the regulations
Decarbonisation, ESG and sustainability were brought to the fore in 2020, and are gaining even more prominence and traction in 2021. The whole world has its eye on a net zero target, with the acute awareness of the increase in action that we all need to take to get there.
We take a look at how financial institutions are playing a role in achieving this goal.