Lending chronology

This overview is a guide to the Banking & Finance content within the Lending chronology subtopic, with links to the appropriate materials.

Loan transactions typically follow a specific chronology which is explained in this overview.

For more information on loan transactions in general, see the Loan transaction collection—the Banking & Finance loan transaction collection is a guide to loan transactions. It provides an overview of each phase of a loan transaction and the tasks that lawyers are required to complete as part of each phase. The collection includes links to Checklists, Precedents (with Drafting Notes), Forms, Practice Notes and an explanation of the key drafting and negotiating points to consider in loan transactions.

Term sheet and mandate phase

Loan transactions typically start with the term sheet and mandate phase. During this phase, the parties to a potential transaction will enter into confidentiality arrangements, agree the key terms of the transaction and establish their roles in the deal.

The length of this phase will vary considerably, depending on the complexity and nature of the deal.

How detailed a term sheet is will vary—sometimes only key commercial terms

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ISDA and FIA respond to CPMI-IOSCO consultation on FMI general business losses

The International Swaps and Derivatives Association (ISDA) and Futures Industry Association (FIA) have submitted a joint response to the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) consultation on the management of general business risks and general business losses by financial market infrastructures (FMIs). The associations supported the principle that infrastructures should maintain sufficient resources to absorb losses for which they are solely responsible, as these losses arise from risks within their control and should not be allocated to participants. They welcomed a more prescriptive approach, noting that previous international assessments identified significant inconsistencies and gaps in existing practices. ISDA and FIA called for clearer and more consistent standards for identifying loss scenarios, determining the size of liquid net assets funded by equity, and setting expectations for transparency, governance and stakeholder engagement. They recommended increasing the minimum equity-funded resource requirement beyond six months of operating expenses, adopting common scenario standards across infrastructures, improving disclosure of risk management assumptions and available resources, and conducting post-guidance assessments to support global convergence. The associations also reiterated their opposition to the use of variation margin gains haircutting to cover general business losses, citing its misalignment with the nature of such losses and its potential to undermine market stability.

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