Increased costs
Increased costs

The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:

  • Increased costs
  • Costs of funding
  • Increased costs clause
  • What costs can be covered?
  • Borrower protections

BREXIT: As of 31 January 2020, the UK is no longer an EU Member State, but has entered an implementation period during which it continues to be treated by the EU as a Member State for many purposes. As a third country, the UK can no longer participate in the EU’s political institutions, agencies, offices, bodies and governance structures (except to the limited extent agreed), but the UK must continue to adhere to its obligations under EU law (including EU treaties, legislation, principles and international agreements) and submit to the continuing jurisdiction of the Court of Justice of the European Union in accordance with the transitional arrangements in Part 4 of the Withdrawal Agreement. For further reading, see: Brexit—introduction to the Withdrawal Agreement. This could have an impact on this Practice Note if lenders face increased costs through the introduction of new legislation and regulations and they decide to recover such costs in practice by triggering the increased costs clause in the loan agreement. For guidance, see Practice Notes: Brexit—impact on finance transactions and Brexit—documentary implications for facility agreements.

This Practice Note considers the costs that a lender operating in the interbank market will incur when providing funding to a borrower and the steps that it will take within the facility documentation to ensure that any increase in these costs will