Insights

New York – April 1, 2021: Crowell & Moring and Kibbe & Orbe have joined forces effective today to provide expanded service offerings to clients in the financial services industry.  Twenty-four lawyers from the storied financial law firm are now part of Crowell & Moring’s New York, London, and Washington, D.C. offices, including Jennifer Grady, managing partner and chair of the firm’s executive committee, who will co-chair Crowell & Moring’s Corporate practice; three founding partners, Jonathan Kibbe, William Orbe, and Michael D. Mann, and the managing partner of the London office, Andrew M. Martin.

Any party active in the global secondary loan market will, at some point, come across questions or concerns involving the formation of a binding contract. These may be questions regarding whether an agreement to trade was made, what terms of the trade had been agreed, or even how the rules of contract formation apply to a telephone call, email or instant message conversation. In this global market the first question is: which country’s law governs contract formation? The second question is whether oral trades are enforceable in that jurisdiction. 

In today’s distressed global financial markets, the emerging focus is once again on counterparty credit risk, as it was in the aftermath of the Lehman Brothers collapse a decade ago. The European secondary loan market uses a standard form “loan participation” to transfer borrower risk and the economics of a loan in the secondary market. Several forms of loan participations are published by the London-based Loan Market Association (the “LMA”). For those investors holding loan participations under the LMA Funded Participation, a particular topic of concern, in addition to the credit risk of the underlying borrower, is the credit risk a of the lender selling the loan in the market. The seller is called the “grantor” of the participation.