I - Interpretation (bonds and notes)
11/7/14
When construing the terms of a tradable financial instrument the court should test any interpretation against the commercial consequences. It is not the case that commercial considerations have no role to play in deciding whether a particular meaning is ambiguous. Applying the right approach, a clause which allowed reinvestment of money if the ratings of the senior notes "have not been downgraded below their initial ratings", was referring to a downgrade from the original rating of the notes at the time of the reinvestment, and not any historic downgrade which had been followed by a subsequent upgrade back to the original rating.
9/4/14
Loan note repayments had been correctly applied to repay senior notes rather than being reinvested. The reinvestment criteria required that the note ratings had not been downgraded. For that purpose it was sufficient that the ratings had been downgraded even if the ratings had later risen back to their initial ratings. Contains a useful summary of the applicable principles of contractual interpretation [37]. Where the transaction is one where rights can be transferred (such as title documents or tradable financial instruments) it is reasonable to assume that the parties will have been particularly conscious of the need for clarity and certainty in the language used and the court should be particularly cautious about departing from the ordinary and natural meaning of the words.