What does this Practice Note cover? This Practice Note provides an overview of the successor provisions under the 2014 ISDA Credit Derivatives Definitions (the 2014 Definitions). It explains how a successor is determined (including the meaning of relevant obligations and the steps taken by the calculation agent and the ISDA Determinations Committee (DC)), and the documents that are required to identify a successor. What are successors? 'Reference entity' is defined in Section 2.1 of the 2014 Definitions as being the entity specified in the confirmation as well as any successor. A reference entity is key to the value of the credit derivative transaction (see What are credit derivatives?—What is a credit derivative? for a description of what a reference entity is) and so if this entity changes (by way of merger, takeover, etc), it can affect the value of that transaction as the creditworthiness of the new reference entity may not be the same as that of the original reference entity. If the new reference entity is weaker, the buyer of the transaction will benefit and if the new

This Practice Note explains the circumstances in which a convicted offender may receive a reduced sentence for having pleaded guilty in accordance with section 73 of the Sentencing Act 2020 (SA 2020), also referred to as the Sentencing Code, and the Sentencing Council’s overarching guideline on the reduction in sentence for a guilty plea. Basis for giving credit for an early guilty plea The court has the power to reduce the sentence it had determined in order to reflect the fact that the offender has pleaded guilty. How much credit is given for the guilty plea depends upon the stage at which the guilty plea is indicated by the defendant. The maximum level of reduction in sentence for a guilty plea in criminal proceedings is one-third. When sentencing for murder, a guilty plea will not reduce a whole life term. In other cases, any reduction must take account of the overall minimum term and other available reductions to avoid an inappropriately short sentence. The reduction for a guilty plea is capped at one-sixth or five years,

Restructuring & Insolvency analysis: In a wide-ranging judgment determining a number of consequential matters following a value added tax (VAT) fraud claim, the court has given useful guidance in relation to the treatment of proprietary claims when valuing equitable compensation. Written by Phillip Patterson, barrister, Gatehouse Chambers.

The supply of a replacement hire vehicle on a credit basis to the not-at fault vehicle owner following an accident.

Replacement vehicles and hire generally Where a driver’s vehicle has suffered damage in an accident sufficient for it to require repair or replacement, they may well need a replacement vehicle. Some drivers may have the opportunity (perhaps under their own insurance cover) to use a courtesy car during the period when their vehicle is unavailable to them. However, for many drivers such a facility will not be available and they will wish to consider the hire of an alternative vehicle. The standard hire of vehicles will, as a matter of course, require the hirer to settle all hire charges on completion of the period of hire, often with a sizeable deposit having been paid up front. If the replacement vehicle is needed for a significant period, the hire charges could be substantial. The driver, particularly if they are the innocent party, may be reluctant or unable to meet such charges. Where the driver was not at fault for the accident, they may well be able to access hire of a replacement vehicle by a different arrangement,

Enforceability of contracts Some credit hire agreements have been vulnerable to attack as unenforceable where the credit hire company has failed to comply with certain regulations, concerning either the agreement itself or the formalities. The significance of an agreement being unenforceable, as against the hirer, is that in such circumstances the hirer has suffered no loss and has no right to recovery. Consumer Credit Act and exempt agreements As was confirmed in the House of Lords in the case of Dimond v Lovell, such hire agreements are credit agreements and are subject to the Consumer Credit Act 1974 (CCA 1974) (as amended by the Consumer Credit Act 2006) unless the terms meet the conditions for exemption. If the agreement is found not to be exempt, and is therefore a regulated agreement, it is likely to be found to be improperly executed, pursuant to CCA 1974, s 61(1)(a) for failing to state the 'total cash price for the services' at that stage. However, the Court of Appeal in Clark v Tull (trading as Ardington Electrical Services)

Defendant insurers commonly raise issues going to the quantum of the claim for hire charges. The common areas of dispute are: • need/type • period • rate For further guidance on credit hire claims, see Practice Notes: Credit hire—an introduction, which includes the Supreme Court case of Armstead (recovery of contractual liabilities owed by the claimant to the hire company for damage to the hire car caused by the defendant), and Credit hire—common liability issues. Need/type of replacement Unless the claimant has access to an alternative vehicle, was too injured to drive following the accident or was on holiday for the period of vehicle hire, it is usually fairly easy for the claimant to evidence they needed a replacement vehicle. Disputes may arise where claimants have hired, as a replacement for their own vehicle, an expensive or prestige model. The need to hire such a costly type of vehicle rather than a standard model may be challenged. The same principles are also applied to the type of car hired. The claimant has a duty

In legal practice, a credit instrument is a broad, descriptive term for a document that evidences a right to payment of a debt or a deferral of payment. It is not generally a defined term in UK or Irish legislation, although particular instruments are: for example, bills of exchange and promissory notes are governed by the Bills of Exchange Act 1882 (and equivalent legislation in Ireland and Northern Ireland).Typical examples include promissory notes, bills of exchange (including cheques), loan notes, bonds and debentures. Key legal features include whether the instrument is negotiable (transferable by delivery and/or endorsement with the transferee taking free of defects), bearer or registered, and any contractual transfer restrictions. In finance and secured lending, the term is used to identify debt claims that can be assigned, novated, or taken as security (with perfection commonly by possession for negotiable instruments, or by notice/registration for others).Usage is broadly consistent across England & Wales, Scotland, Northern Ireland and Ireland, though limitation/prescription periods and some enforcement mechanics differ by jurisdiction. In consumer contexts, practitioners may refer informally to “credit instruments”, but statutory regimes (for example, under the Consumer Credit Act 1974) use specific terms such as credit agreement or credit-token.

This Practice Note provides an overview of the rules that apply to credit limits. A borrower will be set a credit limit on the maximum amount of credit which can be drawn down under a running credit agreement such as a credit card. Definition of credit limit A credit limit is used in running-account credit agreements and is the maximum debit balance that, under a credit agreement, is allowed to stand on the account, disregarding any term of the agreement that allows the maximum to be exceeded on a temporary basis. ‘Running-account credit’ is defined in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, SI 2001/544, art 60L (RAO) and includes credit cards. Credit limits in advertising When a financial promotion indicates a rate of interest or an amount relating to the cost of credit, whether expressed as a sum of money or a proportion of a specified amount, creditors are required to include a representative example, which must include the total amount of credit. See Practice Note: The regulation of consumer credit advertisements—CONC 3—Specific rules for particular types of

What is a credit linked note? A credit linked note (CLN) is a funded credit derivative (see Practice Note: What are credit derivatives?). Unlike a credit default swap (which is in essence its unfunded equivalent), a CLN will be reflected on the balance sheet of the issuer of the CLN. A CLN takes its underlying value from the credit risk of a third party, known as the 'reference entity'. At its most simple, a CLN is a note issued by an issuing entity (the protection buyer) whereby on the issue date the noteholder (or protection seller) pays the face amount of the note and thereafter receives an agreed rate of return until a credit event occurs on the underlying reference entity or the note matures. A CLN provides an investor with the returns of a potentially risky reference entity without needing to own that reference entity. Who issues and buys credit linked notes? Credit linked notes are generally issued by special purpose vehicles or financial institutions. They are typically purchased by financially sophisticated investors—pension

A rating of how much investment risk is associated with a debt issue. Ratings are provided by agencies such as Fitch, Moody's and Standard & Poor's.

IOSCO standards The key document produced by the International Organization of Securities Commissions (IOSCO) to set regulatory standards for credit rating agencies (CRAs) is the Statement of Principles regarding the activities of Credit Rating Agencies first published on 25 September 2003 (the Statement of Principles). IOSCO has also published a Code of Conduct Fundamentals for Credit Rating Agencies (the Code of Conduct), first published in December 2004 and most recently revised in March 2015. CRAs are required to take IOSCO's Statement of Principles and Code of Conduct into account as part of their activities and national regulators are required to reflect the standards in regulatory requirements and guidance. The Code of Conduct provides the following definitions of a 'credit rating' and a 'credit rating agency': • Credit rating—an opinion regarding the creditworthiness of an entity, a credit commitment, a debt or debt-like security or an issuer of such obligations expressed using an established and defined ranking system. Credit ratings are not recommendations to purchase, sell or hold any entity • Credit rating agencies—entities whose business is the issuance