In this In Practice article Finance partner Charles Bischoff and Senior Associate Tom Maclean examine the impact of COVID 19 on lenders and borrowers in the speciality finance space.
Lenders in the speciality finance space make available debt facilities to financial institution borrowers (for example, SME lenders, mortgage providers and auto financiers) in order to refinance (in part) loans originated by those borrowers to their underlying customers. Facilities are secured over, amongst other assets, the borrowers’ rights in respect of the loans they make to their underlying customers. Over recent months, facility documentation entered into by those lenders and borrowers has come under intense scrutiny, with market participants having to react to the unprecedented and changing market pressures arising as a result of the COVID-19 pandemic. In this article, we explore the considerations for both lenders and borrowers as they navigate this uncharted territory.
This article first appeared in the July / August 2020 edition of Butterworths Journal of International Banking & Financial Law.
