Developing Markets
Developing markets offer great opportunities as global dynamics shift, demand for their resources increases and new technologies evolve. At the LMA, we seek to bring about increased efficiencies and standardisation in developing markets, whilst educating our members about the opportunities and challenges they may face when operating in these regions.
Latest News
LMA publishes guidance on documentary considerations when dealing with sovereign obligors
On 7 June 2024, we are pleased to have published a guidance note which sets out documentary considerations when dealing with a sovereign borrower or guarantor. The guidance has been produced following demand from our members, partly driven by recent experiences in the market in respect of sovereign distress cases.
The guidance note is intended to be a helpful tool for lenders, investors, borrowers and advisers of the relevant considerations in the context of dealing with sovereign obligors (which includes for these purposes a state-owned entity).
The note can be found under the Issues and Guidance, Export Finance and Developing Markets sections of the Documents Index.
LMA publishes South African law JIBAR rate switch agreement to assist with market transition to ZARONIA
On 9 May 2024, we published further South African law documentation to assist the loan market in transitioning away from JIBAR to compounded ZARONIA.
The Unsecured Single Currency Single Borrower Term and Revolving Facilities Agreement Incorporating Rate Switch Provisions (the “Exposure Draft SA Rate Switch Agreement”) provides for an in-built switch from JIBAR to a backward-looking compounded ZARONIA on the occurrence of specified trigger events. It includes mechanics and provisions for transition which are intended to mitigate the risk of a further amendment being required.
South Africa: MPG publishes update on JIBAR transition plan
On 6 May 2024, the South African Market Practitioners Group (MPG) published an update on the JIBAR transition plan which outlines the roadmap for increasing the use of the South African Rand Overnight Index Average (ZARONIA) in financial markets and transitioning away from JIBAR.
The transition plan contains an indicative timeline for transition and maps out the transition trajectory away from JIBAR. The plan comprises three key parallel pillars each with critical milestones.
The South African Reserve Bank (SARB) has urged market participants to engage actively with transition efforts and raise any concerns that they may have expeditiously. The SARB will determine the appropriate time for ceasing the publication of JIBAR, which will be preceded by an announcement of the event and the JIBAR cessation date.
