...The market disruption clause often appears in a corporate s (the Borrower s) bank loan documentation and, if invoked by banks (the Lenders), it can increase the base funding cost of the borrowing requested for the specified interest period. This clause has been thrown into the spotlight because, during the recent dislocation in interbank funding, some banks in Asian and Middle Eastern borrowing groups have invoked the clause and passed o n their increased costs of USD\01denominated f unding to Borrowers. As the clause is common to most bank documentation, and given continuing interbank funding issues, the potential exists for Lenders to invoke the clause i n relation to home market EUR\01 and GBP\01denominated l ending. While there has been much press speculation that the clause may be invoked in Europe, Fitch is unaware of any such cases to date. In Fitch Ratings opinion, the clause has not been invoked by Lenders...
