The following Banking & Finance practice note Produced in partnership with Kathryn Emmett of Norton Rose Fulbright, Katie Knight of Norton Rose Fulbright and Rosa Mottershead provides comprehensive and up to date legal information covering:
This Practice Note considers the green loan market, focusing on the Green Loan Principles (GLP), published by the Loan Market Association (LMA) and the Asia Pacific Loan Market Association (APLMA).
Until the development of the GLP (see Green loan principles below), ‘green loans’ has been used as a generic term for any type of loan instruments, the proceeds of which are used to finance or re-finance environmentally sustainable activity. Multilaterals and development banks have been heavily involved in providing green loans to support renewable energy and other projects which reduce greenhouse gas emissions, mostly in emerging markets. The Green Loan Principles are not intended to apply to this type of lending, and are a private sector-led response to increasing demand from borrowers in developed markets for a product which can be easily recognised as ‘green’.
Commercial banks have been entering into green loans for several years, with a number of European and Asian banks particularly active in sectors including agriculture and industry. This follows the success of the green bond market, which has generated demand for an equivalent debt product from companies which are unable or unwilling to access the bond markets, including small-to-medium enterprises (SMEs). (For more information on green bonds, see Practice Note: Green bonds).
Demand has arisen as companies seek to enhance their perceived green credentials and also anticipate increased reporting
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When restructuring is considered rather than formal insolvency proceedings (see Practice Note: Benefits of restructuring over formal proceedings) the company may want to ensure that relevant creditors quickly enter a standstill agreement to gain some breathing space to consider a restructuring
Who is a fiduciary?There is no comprehensive list of the relationships which give rise to the existence of fiduciary duties under common law. Some relationships are automatically fiduciary, eg those between trustee and beneficiary, solicitor and client, principal and agent, business partner and
STOP PRESS: The Corporate Insolvency and Governance Act 2020 contains provisions which, on a temporary basis (presently until 31 December 2020) impose significant limitations on the ability for a creditor to seek a winding-up order against a company. For further reading, see Practice Note: Corporate
Definition of automatismAn act is done in a state of automatism if it is done by the body without control by the mind, (eg it is a spasm or a reflex), or if it is done by a person who is not conscious of what they are doing. The act may be described as involuntary, but will not be regarded as such
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