September 26, 2016 - A new issue was buzzing around the market last week: Whether the OCC would change rules that currently permit banks to invest in CLOs. Here’s the issue. On September 8th, the Fed, OCC and FDIC released a mandated report (“Section 620 Report”) to Congress and FSOC on investments that banks may engage in under current law.
September 23, 2016 - In a decision of great importance to secured lenders, the bankruptcy court in Aéropostale ruled that a secured lender could “credit bid” (i.e., use of the amount of its secured debt rather than cash as currency in a sale of the debtor’s assets) the full amount of its secured claim in a sale process commenced by a debtor pursuant to Section 363 of the U.S. Bankruptcy Code (a “363 sale”).
September 23, 2016 - While secondary US loan trading volumes totaled just $44.6 billion during August, activity actually improved 5% from July, the slowest month of trading since November 2014. Still, while trade activity improved modestly in August, trading volumes averaged just $2 billion per day, compared to an average of $2.8 billion per day across 2016.
September 21, 2016 - Despite widespread Zika concerns - which were extensively ridiculed by Miami-based friends of your correspondent - CLO practitioners descended upon IMN’s ABS East Conference this week. A big theme? US Risk Retention. With less than 100 days left before it goes live, most speakers acknowledged that Risk Retention is the New Normal.
September 9, 2016 - During the first six trading sessions of September, loan prices in the secondary market continued to grind higher – up 25 basis points, to an average bid of 94.75. As of press-time, the S&P/LSTA Leveraged Loan Index (LLI) has returned 7.1% on the year – the best performance we’ve seen since 2012.