Oceania: Finance and Banking

The Supreme Court of New South Wales has ruled that a default interest rate of 3% per month, compounded monthly, constitutes an unenforceable penalty despite valid loan documentation. This landmark decision challenges traditional lending structures where borrowers receive discounted rates that revert to higher rates upon default, requiring lenders to demonstrate legitimate commercial justification for increased default interest rates.

Precious-metals streaming has evolved into a substantial financing tool for Australian mining projects, offering developers an alternative to traditional project finance. With major transactions demonstrating streaming's viability across junior developers and major producers alike, mining companies now face strategic choices about capital structure.

ASIC is set to increase the net tangible assets requirements for responsible entities of registered managed investment schemes, IDPS operators, and corporate directors of retail CCIVs, with changes taking effect from 1 July 2027. The updated thresholds will reflect inflation adjustments since 2013 and will be indexed annually going forward. Entities impacted by these regulatory changes will need to ensure compliance with the new minimum financial requirements before the implementation date.