Talking Trade Finance

Structuring trade finance transactions using SPVs: Balancing the risks and rewards

Posted by Sam Fowler-Holmes on Nov 10, 2021 5:23:04 PM

Written by Matilda Johnson, Trainee Solicitor

At the latest Trade & Export Finance webinar, Sam Fowler-Holmes, a partner in the Trade & Export Finance Group at Sullivan's London office, gave some valuable insight into what to consider before using a special purpose vehicle (SPV) in trade finance transactions. As SPVs become increasingly commonplace in trade structures, particularly in the receivables finance sphere, this is a timely opportunity to consider some of the "risks and rewards" associated with SPV structures.

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Topics: SPVs, special purpose vehicles

Autumn 2021 Updates on LIBOR Reform

Posted by Jacqueline Cook on Nov 2, 2021 9:05:00 AM

It is starting to feel as if we are nearing the end of a long climb, in fact the end of a long period of uncertainty, for financial institutions and businesses alike, on how to deal with LIBOR transition. Having to keep an eye on regulators' statements, legislation, market developments and a large number of publications and webinars from trade bodies, takes quite an effort and indeed a considerable amount of time, not least when parties are also dealing with the economic fallout of the pandemic and trying to keep trade going. So, are we nearly there?

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Topics: SONIA, SOFR, LIBOR, LIBOR Reform, ESTR

Sullivan, Deutsche Bank and ITFA Launch 3rd Edition of "A Guide to Receivables Finance"

Posted by Geoff Wynne on Oct 6, 2021 9:19:48 AM

Together with Deutsche Bank and the International Trade Finance Association (ITFA), I am delighted to announce the publication of the 3rd Edition of "A Guide to Receivables Finance."

In the six years since the publication of the second edition of the Guide, a great deal has happened in the world of receivables financing, not least in the areas of digitalisation, fintech and regulation. With the help of a number of industry experts, this third edition attempts to update the changes that have occurred in law and practice for all those who participate in receivables finance.

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Topics: Receivables Financing, digitisation

Digital trade transactions – what next?

Posted by Amanda Montano on Aug 13, 2021 3:49:02 PM

By Amanda Montano, associate, and Stefan Bateson, trainee

At the latest Trade & Export Finance webinar, Geoff Wynne, head of the Trade & Export Finance Group and Sullivan's London office, gave a whistle-stop tour of recent developments in digital options available in trade finance, including the multi-jurisdictional efforts to recognise electronic transferable records.

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Topics: electronic signatures, ITFA, digitisation, URDTT, MLETR, UNICITRAL

So Far... and Is SOFR So Good?

Posted by Jacqueline Cook on Jul 30, 2021 3:27:00 PM

By Jacqueline Cook, Senior Knowledge Development Lawyer

Following much anticipation, the Alternative Reference Rate Committee (ARRC) has announced its official recommendation of the CME Group’s forward-looking Secured Overnight Financing Rate (SOFR) term rates (SOFR Term Rates). Market participants should now have "all the tools"[1] needed to transition to US dollar (USD) SOFR.

Earlier this week, ARRC issued two press releases:

  • publishing (a) conventions for SOFR Term Rates and (b) best practice recommendations for the use of SOFR Term Rates, and announcing the SOFR First Convention switch for USD linear swap trading;[2] and
  • recommending CME Group SOFR Term Rates and publishing a factsheet on key steps and milestones for the LIBOR transition.[3]

ARRC’s announcement has been welcomed as "an important milestone for the industry and the continued development of the broader SOFR ecosystem."[4]

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Topics: SOFR, LIBOR, Alternative Reference Rate Committee, SOFR Term Rates

Payments - Problems and Practical Solutions

Posted by Amanda Montano on Jul 22, 2021 2:57:59 PM

By Amanda Montano, Associate, and Raghav Vohora, Trainee

This blog post is the second instalment of our two-part series covering our June 2021 Trade & Export Finance Webinar, "Payments, Problems and Practical Solutions for Trade and Export Finance Transactions".

Following on from our recent coverage of the Revlon loan dispute[1], we briefly consider the nature of payments, as well as the consequences of making an erroneous or late payment. We also address the ways in which parties risk payments being diluted by virtue of forces beyond their control or as a result of common contractual provisions.

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Topics: payment disputes, payments

What Happens if You Make a Payment in Error? – The LMA Responds to the Revlon Loan Dispute

Posted by Amanda Montano on Jul 2, 2021 2:33:56 PM

Few cases in recent memory have stirred up as much concern and controversy in the syndicated loan market—on both sides of the Atlantic—as the Revlon case.[1] The ruling of the New York federal court in Revlon was that the recipients of erroneous wire transfers made by Citibank N.A. (Citibank), acting in its capacity as administrative agent for a syndicated loan facility made available to Revlon, Inc., were entitled to keep almost $500 million of Citibank’s own money. This was notwithstanding the fact that Citibank had only intended to transfer $7.8 million in interest payments and not the $900 million or so that was actually transferred by mistake. Indeed, had it not been for some of the recipients returning the mistaken payment they received, Citibank’s losses could have been even more significant.

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ESG in Trade and Export Finance

Posted by Mark Norris on Jun 28, 2021 9:03:34 AM

By Mark Norris, Partner and Theodora Okocha, Trainee

Environmental, Social and Governance (ESG) is currently at the forefront of discussions around trade and export finance, yet its application in this field is still unclear. At a time where a lot of money is moving from traditional financing into sustainable financing, market participants want to know how ESG can be implemented (and documented) into their transactions in a meaningful way.

In this blog post, we consider some of the key ways in which ESG has impacted trade and export finance, including Green and Social Loans, Sustainability Linked Loans and the push to create market standard drafting to address ESG principles.

Growth in ESG Lending

There has been significant growth in ESG lending in recent years, with Bloomberg LP reporting the increased issuance of ESG bonds and loans from $26.6 billion in 2013 to $732.1 billion in 2020. Notably, the growth of Sustainability Linked Loans has surpassed the growth of Green Loans (both described below) in recent years.

The UK government is providing significant support for sustainable projects, with the UK’s export credit agency (UKEF) contributing £2.4 billion to sustainable projects in 2020 and a further £2 billion earmarked by the UK government to support the UKEF clean growth direct lending facility for “clean growth” and “green” projects.

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It’s a Digital World – Embracing Technology in Trade Finance

Posted by Amanda Montano on Jun 4, 2021 8:26:17 AM

By Amanda Montano, Associate

Following Sullivan’s recognition as a Leader in Trade for Innovation by Global Trade Review (GTR) for recent contributions to the digitalisation of trade finance, this is an opportune moment to recap the progress that has been made in this space over the past 18 months.

The various local and global lockdowns forced by the COVID-19 pandemic, which no one could have foreseen at the beginning of 2020, have put the spotlight firmly on the challenges of operating a paper-based industry—such as is international trade finance—in the 21st century and the practicalities of obtaining original documents (e.g. bills of lading and warehouse receipts) and wet ink signatures in a world where many are working from home. In considering how the industry has adapted, one thing has become clear—there is certainly scope to improve the manner in which trade transactions are conducted going forward.

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Leaving Lugano: Is this the last chapter in the Brexit saga on jurisdiction and judgments? “Oui ou Non?”

Posted by Jacqueline Cook on May 7, 2021 1:16:32 PM

By Jacqueline Cook, Senior Knowledge Development Lawyer

The uneasy rumblings in the media recently on whether the UK would be welcomed back by the European Union (EU) into the Lugano Convention family were confirmed on 4 May 2021, when the European Commission issued its 'Communication from the Commission to the European Parliament and the Council'[1] with its assessment on the application of the UK to accede to the 2007 Lugano Convention on the jurisdiction and recognition and enforcement of judgments (Lugano Convention). It recommended that the EU should not give its consent to UK accession. This communication has been met with disappointment by the legal profession[2] and characterised by the media as a political decision, rather than one based on common sense. However, there is room for hope — this is not quite the last chapter in the saga of the EU/UK relationship in the area of choice of court agreements, jurisdiction and judgments.

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Topics: Brexit, Lugano Convention

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About the Blog


Talking Trade Finance is here to provide you with all of the latest updates in the Trade & Export Finance Industry.

The material on this site is for general information only and is not legal advice. No liability is accepted for any loss or damage which may result from reliance on it. Always consult a qualified lawyer about a specific legal problem.

Meet the Editor


fowler-holmes-1

Sam Fowler-Holmes is a partner in the Trade & Export Finance Group in Sullivan’s London office. He specialises in structured and unstructured trade, commodity and export finance, advising both financial institution and corporate clients on a range of financing products including pre-export financing, prepayment financing, letter of credit and payment instrument facilities and working capital and borrowing base financings. Sam is a regular speaker at the Sullivan trade and export finance seminars and is a member of the ITFA Emerging Leaders Committee.

 

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