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La Cour suprême du Canada tranche : les cadres ne pourront se syndiquer au Québec
Le 19 avril dernier, la Cour suprême du Canada a rendu une décision fort attendue en matière de syndicalisation des cadres.
Mondial | Publication | juin 2021
Since our article on the topic in the December 2020 edition of Legalflyer (link), there have been further developments in the retirement of LIBOR. On March 5, 2021, the UK’s Financial Conduct Authority (as regulator of ICE Benchmark Administration, which publishes LIBOR) announced that:
Although LIBOR will still be published for the most popular USD tenors until Q2 2023, regulators have re-emphasized the need for new and refinanced transactions to no longer reference LIBOR and to prepare for legacy LIBOR deals to transition to new benchmarks.
As aircraft are a US Dollar asset, the most important risk-free rate for the aviation industry is the Secured Overnight Financing Rate (SOFR), the risk-free rate identified for US Dollars. The Alternative Reference Rates Committee of the Federal Reserve Bank of New York (ARRC) has stated that new US Dollar LIBOR lending should cease by end of Q2 2021, with the Federal Reserve Board issuing supervisory guidance to US banks “cease entering into new contracts that use USD LIBOR as a reference rate as soon as practicable and in any event by December 31, 2021”. The approach taken by other regulators may vary between jurisdictions, but these statements will be persuasive.
We will increasingly start to see US Dollar lending referencing SOFR from the outset for new and refinanced facilities.
In the short term, fallback provisions, which pre-agree a mechanism for a loan facility to transition from LIBOR to SOFR on a future date, may be used, after which regulators are likely to require parties to use SOFR from the outset.
The drafting approach taken varies between markets. In the London and European markets, the Loan Market Association (LMA) ‘switch clause’ is widely used – this drafting provides more certainty for a borrower as all of the terms of transition are agreed upfront in the clause.
Whereas, in the US market, use of the ARRC recommended “hard wired approach” wording as incorporated into the Loan Syndications and Trading Association’s (LSTA) precedent facility agreements is widespread amongst US-regulated banks. This drafting pre-determines the selected rate calculation method for SOFR by reference to a waterfall and leaves the lenders with more flexibility to make “Benchmark Conforming Changes” (being the changes required to ensure that the new rate works within the context of the loan facility).
The FCA’s announcement of March 5 may have triggered certain consequences in existing finance documentation depending on the drafting formulation used.
If you would like to find out more about the latest developments of LIBOR transition, please visit our "IBOR transition – are you prepared" website.
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Le 19 avril dernier, la Cour suprême du Canada a rendu une décision fort attendue en matière de syndicalisation des cadres.
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