Deal Diary

If, as they say, past is prologue, then boards of directors in the United States should follow closely lessons learned by their European and British counterparts when it comes to the potential role sustainable finance plays in relation to financing the long-term strategic objectives of U.S. companies across all sectors of the economy. Companies and investors alike are demanding sustainable investment opportunities in the form of financial and consumer products, and companies are facing increased pressure to factor in sustainability in terms of long-term growth strategies. In addition, all stakeholders continue to demand access to comparable and reliable metrics in order to evaluate the extent to which a particular investment or product is, in fact, sustainable. Indeed, the foregoing is driving rulemaking initiatives by various federal and state regulatory authorities, including the U.S. Securities and Exchange Commission (SEC). All of these factors deserve the attention by boards of directors.

The upcoming transition from the London Inter-bank Offered Rate (LIBOR), which is published by ICE Benchmark Administration Limited (IBA), to the Secured Overnight Funds Rate (SOFR), which is published by the New York Federal Reserve Bank (NYFRB), has prompted a great deal of discussion in the world of leveraged finance. In particular, the transition from LIBOR to SOFR creates a number of potential issues and pitfalls under existing loan documents, including issues related to when the transition will go into effect, discrepancies between LIBOR and SOFR interest rate “floors” in loan documents and the need to obtain lender consents. Lenders should pay careful attention to these issues and consider whether any changes to their existing loan documents or other loan documentation is necessary.

Election and Impeachment

The presidential race will garner much of the attention during the 2020 election cycle, but there is fierce competition elsewhere, too. Republicans and Democrats are fighting for both U.S. House of Representatives and U.S. Senate seats in the 116th U.S. Congress, with the Republican Party trying to regain House majority. Meanwhile, impeachment proceedings against President Donald Trump are shaping up to be a potential game changer for certain members of the Senate who are running for president. They’ll lose valuable time on the campaign trail while serving as jurors for the duration of the impeachment trial.

Akin Gump launched its Beyond Brexit as an immediate response to the result of the EU Referendum.  The blog serves as a knowledge hub, providing resources and information on the regulatory and policy impact of Brexit.

Rigzone has published the article “Getting Energy M&A Done: Deal Terms Become As Dynamic As Markets,” written by Akin Gump partners Shubi Arora and Andrew Lehman and counsel Jhett Nelson, all members of the firm’s global energy and transactions practice.

On July 14, 2015, Iran and the P5+1 countries (China, France, Germany, Russia, the United Kingdom and the United States), with the High Representative of the European Union for Foreign Affairs and Security Policy, finalized the Joint Comprehensive Plan of Action (JCPOA), a nuclear agreement that would grant Iran sanctions relief in exchange for implementing significant limitations on its nuclear program.

Under the agreement, Iran will be required to remove two-thirds of its uranium-enriching centrifuges and reduce its existing low-enriched uranium stockpiles by up to 98 percent, among other nuclear-related measures. President Obama emphasized Tuesday that the agreement, which is expected to freeze most of Iran’s nuclear efforts for a decade, is “not built on trust,” but “verification.” The International Atomic Energy Agency (IAEA) will monitor and verify Iran’s nuclear-related measures and inspect its facilities, including military sites. If any issues or disputes arise over Iran’s nuclear commitments, a joint commission, consisting of the P5+1 and Iran, will attempt to resolve the matter over a 30-day period. If unresolved after 30 days, the issue will be referred to the United Nations Security Council (UNSC), which will vote on whether to continue sanctions relief or re-impose sanctions on Iran.

In exchange, most European Union (EU) and U.N. sanctions against Iran will be lifted. The United States will generally remove sanctions that apply to non-U.S. persons. U.S. sanctions will continue to apply to non-U.S. entities owned or controlled by U.S. persons, but certain transactions by such entities may be licensed if they are consistent with the terms of the JCPOA. U.S. sanctions that apply to U.S. persons will largely remain in place, with the exception of a permissible licensing regime for the importation into the United States of Iranian carpets and foodstuff (including caviar and pistachios), and trade in civil aircraft and parts. In sum, Iran will still be subject to robust U.S. sanctions, but opportunities will exist for certain non-U.S., as well as U.S., companies in a limited number of industries.

On December 8, 2014, the American Bankruptcy Institute (ABI) Commission to Study the Reform of Chapter 11 published a 400-page report containing far-reaching recommendations.  The report is the result of a three-year study process undertaken by a number of leading insolvency and restructuring practitioners charged by ABI with evaluating the U.S. business reorganization laws and proposing reforms “that will better balance the goals of effectuating the effective reorganization of business debtors ─ with the attendant preservation and expansion of jobs ─ and the maximization and realization of asset values for all creditors and stakeholders.”