The following Restructuring & Insolvency practice note provides comprehensive and up to date legal information covering:
BREXIT: The UK is leaving the EU on Exit Day (as defined in the European Union (Withdrawal) Act 2018). This has an impact on this Practice Note. For further guidance on the impact of Brexit on securitisation, see Practice Note: Impact of Brexit: Securitisation Regulation—quick guide.
Essentially, securitisation makes use of a receivables income stream through the creation of a special purpose vehicle (SPV) which issues bonds or notes to obtain cheaper finance. It was originally used in the US and is essentially a sophisticated method of factoring receivables. Types of receivables which can be securitised include:
bank loan repayments
credit card repayments
insurance premium payments
Benefits of securitisation include:
cheaper borrowing—the SPV may get a better credit rating than the debtor company (originator). Either the obligors for the receivables have a better credit rating than the originator, or credit rating agents may find it easier to rate a single asset (the receivables) as opposed to the originator, which has more variables. A better credit rating means that the SPV can issue bonds/notes with lower yields so reducing the cost of funding (see Practice Note: Impact of credit ratings downgrades)
balance-sheet improvements—the process accelerates cash receipts for the originator, so rather than having to wait for the receivables to be collected in, it receives an up-front payment from the SPV. This reduces
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Overlapping insurance policesThere are various reasons why an insured may end up with overlapping insurance cover, whether deliberately or otherwise.Examples include the situation where the insured takes the benefit of other insurance arranged by another party or where, in the commercial world, risk
Disposal and devolutionThe equity of redemption arises as soon as the mortgage is made. It is an interest in the land which the mortgagor can:•transfer, lease or mortgage inter vivos, or•by will (it passes on intestacy)No cloggingIt is a fundamental principle of a mortgage that there must be no clog
Brexit: The UK's departure from the EU on exit day ie Friday 31 January 2020 has implications for practitioners dealing with provisions in the CPR relevant to cross border matters, including CPR 5.4C (discussed below). For guidance on the impact of Brexit on the CPR, see Cross border
This Practice Note considers the legal concept of mistake in contract law. It examines common mistake, mutual mistake, unilateral mistake, mistake as to identity and mistake as to the document signed (non est factum). It also considers the impact of each of these types of mistake on the contract and
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