How companies borrow money — from bilateral loans to billion-pound leveraged buyouts.
Banking and finance (often shortened to B&F) is the practice area that deals with lending transactions — the legal architecture through which companies borrow money from banks and institutional lenders. While capital markets focuses on raising funds by issuing securities to investors, banking and finance covers the private, negotiated lending that sits alongside (and often funds) those deals. The work ranges from straightforward bilateral loans (a single bank lending to a single borrower) to immensely complex syndicated facilities involving dozens of lenders, multiple tranches of debt, and intercreditor arrangements. At Magic Circle and US firms, banking and finance is one of the largest practice groups by headcount and revenue, and it touches almost every major transaction the firm handles.
The core document in any lending transaction is the facility agreement — the contract between the borrower and its lenders. Most large facilities in the UK and European markets are documented on LMA (Loan Market Association) standard forms, which provide a widely recognised baseline that lawyers then negotiate and tailor. A facility agreement typically includes term loans (a lump sum drawn down at the outset and repaid by maturity), revolving credit facilities (an RCF — a flexible pot the borrower can draw down and repay repeatedly, like an overdraft on a larger scale), and sometimes capex facilities or acquisition facilities for specific purposes. Key negotiation points include the margin (the interest rate above the benchmark — typically SONIA in sterling or SOFR in dollars), the commitment fee on undrawn amounts, the maturity date, and the circumstances in which lenders can demand early repayment.
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