Aplma Risk Participation Agreement

At the time of the letter, it is increasingly likely that LIBOR will disappear at the end (or even before) 2021 and that some kind of RFR methodology will replace it. However, there is still a huge legacy of existing loan contracts, which need to be amended individually, and the problem grows with each passing day. It is clear that credit markets (including borrowers, lenders, agent banks and other financial intermediaries) need to prepare quickly for the decline of LIBOR, and much remains to be done. APLMA also closely followed the consultations of the Bank of England and the Committee on Alternative Benchmark Rates in the United States on the evolution of forward-looking interest rates and the theme of the language of rebback for documentation and recently joined the constituent meeting of the Alternative Rates Working Group established by the Hong Kong Monetary Authority and the Treasury Markets Association in Hong Kong with a view to a possible successor to HIBOR. APLMA recently released the results of a survey that gathered input from its members on the various structuring issues raised by the LMA Exposure Drafts publication, which use risk-free interest rates rather than LIBOR as a primary benchmark. There was an extremely encouraging response and members` views were shared with the LMA. APLMA has also produced (and continues to develop) other related models to assist market participants in their day-to-day operations in the credit market. These include appointment sheets, mandate letters, confidentiality letters and secondary market transaction models (including partial holdings) under English and Hong Kong legislation. Good practice notes also include guidelines on agency functions (among others), royalty sharing, competition law, FATCA, KYC and electronic communications, and many APLMA documents contain “word notes” that help negotiate with clients. In the face of the growing influence of Chinese institutions in the APAC region, important documents have been increasingly translated into Chinese. APLMA recently launched principles to standardize project loan documentation, an important initiative that has been well received in the marketplace. The evolution of benchmark risk-free interest rates and the expected decline of LIBOR cannot have escaped anyone in the past 18 months. The burden of risk-free benchmarks was originally (and understandably) mentioned by derivatives markets, which focused exclusively on historical day-to-day commodity prices, and it is only recently that cash markets have been faced with the fact that the impending changes in benchmark interest rates and the disappearance of LIBOR will have dramatic side effects on cash markets (and in credit markets), where future maturities have become the norm for decades.

All of these standard loan contracts and other related documents are made available free of charge to association members on the APLMA website. This manual serves as a useful reference and can be found on the APLMA website. Concise and easily readable cross-border guides for anyone who needs an understanding of the nuances in the various legal orders. As an international lawyer, I refer more often to ICLG publications than any other professional or scientific publication. John F. Martin – GE Power – Water The various courses in the area have also been very busy. These include competition seminars and webinars, detailed LIBOR transition meetings, and documentation workshops in Hong Kong and Singapore in English and Putonghua. APLMA held its credit market conference in Shanghai in September 2019, in line with the association`s desire to reach several major Chinese cities. This is why APLMA is an active member of the LIBOR Trade Association (mainly led by LMA).

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