Welcome to the June 2020 edition of the Addleshaw Goddard Real Estate Finance Update.  We hope everyone is keeping safe and well in these unprecedented times. 

Clearly Covid-19 is the challenge currently dominating the global agenda and this is reflected in some of the topics included in this Update.  With March and April's IPDs behind us some sub-sectors in our market are feeling the impact.  In the coming weeks there will be increased pressure on portfolios across sectors given the combination of minimal to no trading income for Q2 and an impending wave of IPDs in June and July. LIBOR transition and ESG issues also continue to remain key topics for Real Estate Finance over the coming summer.

Our first article takes a closer look at some of the Government funding schemes which have been introduced to support businesses facing liquidity issues as a result of Covid-19. We focus in particular on the CBILS and the CLBILS (both defined within the article) and the more recent changes to these schemes coming into effect at the end of May 2020. We have been heavily involved in establishing platforms and documentation with several lenders and continue to execute some of the first transactions to hit the market. Please click here to read the article.

Our second article provides an update on the transition away from LIBOR.  Where possible the Bank of England's Risk Free Rate Working Group is largely seeking to keep to its target timetable and is now encouraging funders to cease issuing LIBOR-linked cash products by the end of the first quarter of 2021. We expect to see the market moving further to implement alternative rates despite the challenges surrounding the transition that still remain.  Our Finance team is working with clients on regulatory aspects, risk analysis and repapering.  We also have developed templates for new SONIA lending which we see gradually increasing in several markets now. Please click here to read the article.

Our third article focusses on the continuing importance of ESG issues and looks at recently published guidance on Green Loan Principles (GLP) and Sustainability Linked Loan Principles (SLLP), topics which we have covered in our previous REF updates. The efforts of the APLMA, LMA and the LSTA to develop the GLP and SLLP and each of the guidance documents is reflective of the market's determination to establish a consistent framework for green and sustainable finance and the impact of Covid-19 on the economy has further intensified focus in this respect. Please click here to read the article.

Finally we have included a piece from our Real Estates Disputes experts considering the issues around rent and arrears recovery in the context of Covid-19; recapping on the new restrictions and considering the longer term thinking required to protect asset values. Please click here to read the article.

We will be producing further insight on various sub-sectors of the real estate finance market and looking at issues and trends for investment, development and hotel finance loans.  Please look out for those in the coming weeks and let's continue to keep in touch.