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
South Africa: SARB MPG groups publish recommendations on JIBAR-ZARONIA CAS methodology and “ZARONIA-First” initiative
On 28 November 2024, the SARB MPG workstreams published various recommendations relevant for the transition from JIBAR to ZARONIA.
The Transition Planning and Coordination Worstream published a proposal for the credit adjustment spread (CAS) methodology to apply in the event of a fallback or active transition away from JIBAR. The ISDA fallback methodology of the median value over a five-year look-back period has been recommended.
The MPG Derivatives workstream has also published its recommendations for a “ZARONIA-first” initiative in the derivatives market. This will commence in April 2025 with a view to working towards the milestone of no new JIBAR derivatives as of March 2026.
LMA publishes multi-jurisdictional African facility agreement to assist investors with cross-border lending on the continent
On 24 June 2024, the LMA published a new USD Term SOFR loan agreement, governed by English law while assuming a variety of African borrowers/guarantors including Mauritius, Ghana, Nigeria, Kenya, Tanzania, Uganda and Zambia.
This aims to promote certainty for investors lending into Africa via the “Mauritian Holdco Structure”, whereby international investment is channelled into a Mauritian parent “Holdco” and “on-lent” to operating subsidiaries in the relevant African countries. Mauritius is popular due to a lack of foreign exchange controls, a strategic location, economic, political and legal stability, a raft of double tax treaties with other African countries and a skilled, bilingual workforce.
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.
