Publications: Commercial Finance


  • Life After LIBOR

    August 24, 2017

    Lenders and borrowers, do your loan documents provide for an alternative financing rate in case LIBOR becomes unavailable? LIBOR, which stands for the “London Interbank Offered Rate,” is the most widely used “benchmark rate” in determining interest rates for debt instruments, including government and corporate bonds, mortgages, student loans, credit cards; as well as derivatives such as currency and interest swaps, among many other financial products. LIBOR is derived from the average estimated interest rates at which the world’s leading banks can borrow from other banks. Following inquiries into illegal manipulation in the rate-setting process and billions of dollars in...



  • “Bailing In” to Avoid a Bail Out: How new legislation is putting your money at risk

    May 31, 2017

    As a result of the 2008 global financial crisis and the bailouts that resulted, Europe and the United States have been actively working to avoid future bailouts. Unfortunately, those attempts are being implemented at the expense of depositors. In 2014, the member states of the European Unionadopted the European Union Bank Recovery and Resolution Directive (BRRD) as a means to protect the financial health of, and the banking services provided by, its banks (called “EEA Financial Institutions”). By January 1, 2016, each European Union member state adopted legislation (collectively, the “Bail-In Legislation”) implementing the BRRD, which ultimately gave regulators the power...



  • Regulation A+: An Alternative to Private Placements and Initial Public Offerings

    May 4, 2017

    Regulation A+ went into effect in 2015. Although Regulation A+ has been around for a couple of years, its use is just beginning to become more mainstream. Since Regulation A+ was promulgated, the SEC has qualified 81 Regulation A+ offerings seeking to raise approximately $1.5 billion. As developers and investors gain more awareness of, and comfort with, Regulation A+, it is likely to completely change the way developers and investors raise the equity necessary for a new project or acquisition. Regulation A+ (sometimes referred to as a “mini-IPO” or as an “on-ramp to IPO”) allows investors to raise up to...



  • Alternative Financing Strategies in a World of Rising Interest Rates

    February 16, 2017

    Mortgage interest rates increased through 2016 and are expected to increase periodically throughout the coming year. Because higher interest rates can make traditional financing for a commercial real estate project more expensive, other financing options should be considered to stabilize or reduce the cost of capital necessary to complete a commercial real estate project. Larger real estate projects often use a variety of financing sources to fund the acquisition and improvement of commercial real estate. This combination of different financing sources is referred to as a “capital stack.” As mortgage debt becomes more expensive, a diverse capital stack can reduce the...



  • Supply Chain Fraud: What You Can Do

    February 16, 2017

    The potential for fraud has always existed in the construction, lending and real estate world. However, as electronic communications continue to reach new heights in innovation so has the permeation of complex and sophisticated fraud schemes affecting these and other industries. These trending schemes make it imperative for in-house counsel, business owners, and finance departments to continually review and update your billing practice policies and procedures to protect yourself against this new wave of fraud. In its simplest form, Supply chain fraud occurs when you make a payment to someone you believe to be a legitimate vendor or supplier within that...



  • Potential Relief Looms for Bankers and Developers from the Basel III HVCRE Requirements

    October 3, 2016

    Since the 2008 financial crisis, federal financial regulators have tightened their requirements for capital and liquidity for lenders. Concerns about underwriting standards that led to the mortgage bubble and collapse led to new, stricter risk weighting levels for lenders in certain loan categories under Basel III rules. Designed to increase capital reserves at financial institutions, the long term effect has actually dampened liquidity in the Commercial Real Estate sector, especially for new development loans. Current Basel III rules expanded from only the largest banks to all banks on January 1, 2015. Now all federally regulated institutions must identify which of its...



  • Looking Ahead: Restricting Mandatory Arbitration Clauses

    April 28, 2016

    Does your business include mandatory arbitration clauses in its contracts? Such clauses are increasingly common, but restrictions may be imminent. One source of restrictions may be through rulemaking by the Consumer Financial Protection Bureau (CFPB). Congress, through the Dodd-Frank Act, required the CFPB to study the use of mandatory arbitration clauses in consumer contracts and to issue regulations based on its study. In October 2015, the CFPB announced that it is considering proposing rules that ban arbitration clauses that prohibit consumers from participating in class action lawsuits for products and services the CFPB oversees. These products and services include credit cards,...



  • Battle of the Forms: Practical Tactics to Minimize Risk in Day-to-Day Transactions

    March 7, 2016

    Sales are negotiated and consummated between companies every day. Yet, what often gets overlooked in these negotiations is which company’s terms and conditions govern the transaction. In a typical commercial transaction, a variety of documents may be exchanged between the contracting companies. At minimum, a purchase order and a sales order are usually exchanged. Typically, parties’ affix their terms and conditions to these documents. A standard and simple procedure, right? Not necessarily. In the rush to finalize the deal, companies often fail to adequately take into consideration their contracting partner’s terms and conditions (or ignore them entirely), or the applicability...



  • Corporate Attorney Tom Rohan Discusses Commercial Contract Provisions in New North B2B Publication

    September 1, 2015

    Tom Rohan of Davis & Kuelthau’s corporate, commercial finance, M&A, and real estate teams authored an article, Don’t Let Your Contract Turn Litigation Into a “Road Game”, for New North B2B's September 2015 publication. To read the article, please click here....



  • Corporate Attorney Tom Rohan Discusses Commercial Contracts in New North B2B Publication

    March 1, 2015

    Tom Rohan of Davis & Kuelthau’s corporate, commercial finance, M&A, and real estate teams authored an article, In Commercial Contracts, We Do Not Want to Be Our Brother’s Keeper, for New North B2B’s March 2015 publication. To read the article, please click here....



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