The module examines the international capital markets and the world of international debt finance.
The module focuses on the law, documentation and legal and regulatory issues affecting major transactions in the global financial markets; primarily International Loan Agreements; International Bond Issues; International Project Finance; Derivatives and Securitisations. It provides an in-depth understanding of how such international finance transactions are structured and documented and the various legal and regulatory issues which arise.
The module is taught by two highly experienced practicing lawyers. The module convenor has practiced in the field of international finance law as a partner in one of the largest global law firms for over 30 years and he is supported by a senior in-house counsel at the European Bank for Reconstruction and Development who also has over 20 years of experience as a practicing international finance lawyer. Consequently the teaching on this module is strongly practice-oriented whilst at the same time providing high levels of academic rigour and analysis. Teaching will be based on documentation currently used in the international finance markets and those who study this module will become very familiar with the content and legal issues arising from the use of such documents.
This module is subject to change.
- 1. Overview of the International Debt Capital Markets
Teaching commences with an overview of the debt instruments typically used to raise finance in the international debt finance markets, including the Libor based funding mechanisms used in those markets, the causes and potential implications of the recent Global Credit Crisis and how the raising of the international finance has been affected by that crisis. We will also examine the ongoing debate in respect of LIBOR (interest rate setting).
- 2. International term loan agreements
The form and content of international (cross-border) loan agreements including an analysis of the standard (Loan Market Association) form agreements typically used in the London based international finance markets. We will focus, in particular, on the objectives and legal effect of the key clauses included in such agreements including: Conditions Precedent; Representations and Warranties; Covenants; and Events of Default. Issues arising from the recent LIBOR (interest rate setting) scandal will also be examined.
- 3. Syndicated loan agreements
The form and content of international syndicated loan agreements (multi-bank loans) and an analysis of the roles, obligations and potential liabilities of the various parties thereto including: the arranger/lead manager; agent banks; security agents; and syndicate lenders.
- 4. Loan transfers
How (and why) are loans transferred? Methods of transfer: novation, assignment, sub-participation (risk and funded), proceeds assignment and transfers by way of trust. We will also consider the commercial and regulatory drivers for loan transfers and how such transfers are structured and documented.
- 5. Project finance
This component will focus on the documentation typically used in project finance transactions and the risks (legal and commercial) such documentation is intended to address. Typical project financing structures will also be examined as will the roles of the various parties in such transactions.
- 6. Securitisation and structured finance
This component will focus on “true sale” securitisation transactions including the commercial background and regulatory drivers that underpin the securitisation market. The structure of securitisation transactions will be examined in detail as will the role, rights and responsibilities of the various parties thereto including: originators of securitisation transactions; ‘SPV’ styled issuers; arrangers; investors in securitised bonds; liquidity and credit enhancement providers, and third party service providers.. We will also examine the documentation typically entered into to give effect to such transactions. The impact of the recent Global Credit Crisis on securitisation transactions will be examined in detail, as will recent regulatory developments aimed at addressing some of the perceived weaknesses in the market. We will also examine the role of the international credit rating agencies.
- 7. International bond issues
This component will examine the process of raising international debt finance via the issue of international bonds; the parties to such issues and the fundamental terms typically incorporated. The legal nature of international bonds will also be examined as will the manner in which they are traded. The role and duties of the bond trustee will also be examined in detail.
- 8. Legal opinions
The role of the lawyer in international finance transactions; the form and content of legal opinions commonly delivered in international finance transactions and the potential liabilities for lawyers delivering such opinions.
- McKnight, Paterson and Zakrzewski on ‘The Law of International Finance’ (2nd ed.) (2017), Oxford University Press.
A special print run of this book is produced for students who register for the module at a significantly discounted price.
Module reading lists and other module materials, including standard form documentation typically used in the international finance markets will be provided via online module pages, once students have made their module selections upon enrolment.
The following book provides a good introduction to the subject:
- Colin Paul & Gerald Montagu, Banking and Capital Markets Companion (Sixth Edition 2014), Bloomsbury
|Credit value:||30 credits (15 ECTS, 300 learning hours)|
|Convenor:||Graham Penn (Professor of International Finance Law at UCL and partner at Sidley Austin LLP)|
|Other Teachers:||Jelena Madir (Director, Chief Counsel, European Bank for Reconstruction and Development)|
|Teaching Delivery:||20 x 2-hour weekly seminars, 10 seminars per term, Term One and Two|
|Who may enrol:||Any UCL Master’s student|
|Must not be taken with:||None|
|Qualifying module for:||LLM in Corporate Law;|
LLM in International Banking and Finance;
LLM in International Commercial Law
|Practice Assessment:||Students may submit an answer to a past examination question to obtain feedback|
|Final Assessment:||Exam (100%)|