Unwinding funding transactions: what you don’t know might hurt you

This article by Ognjen Miletic was first published in the Butterworths’ Journal of International Banking and Finance Law.

In this article, Ognjen Miletic tackles the following questions arising from Barnett & Ors v RBS [2015] EWHC 2435 (Ch): if an interest rate swap is linked to external hedging with a third party, such that there is loss to the lender on early redemption, would the borrowers be liable to pay the termination cost? And what if the existence of the swap is not disclosed to the borrower?

This article forms part of an ongoing series being written by members of the Henderson Chambers Banking Finance and Consumer Credit group for the Butterworths’ Journal of International Banking and Finance Law.

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