Loan Syndications and Trading News

October 19, 2017 - In a step that could have far reaching implications for the loan market, on Thursday, the Government Accountability Office (“GAO”) issued an opinion that Leveraged Lending Guidance (“LLG”) issued jointly by the OCC, the Federal Reserve Board and the FDIC (the “Agencies”) is a “general statement of policy” and therefore considered a “rule” for purposes of the Congressional Review Act (“CRA”) and must be submitted to Congress for review. For the uninitiated, this could be big. Really big. The GAO’s decision is available here.

October 19, 2017 - The multi-year process to prepare for any possible transition from LIBOR to a new loan reference rate has accelerated to a trot. First, on October 10, 2017, the Financial Stability Board (“FSB”) published its progress report on implementation. Second, in the U.S., the Alternative Reference Rates Committee (“ARRC”) established a business loans and CLO working group to help the syndicated loan market prepare for any transition from LIBOR to a new reference rate.

October 19, 2017 - The LSTA this week published exposure drafts of the revised LSTA Code Conduct (“Code”) and the Confidentiality Principles (“Code”). Those drafts are available; additionally, they will be discussed at a two-CLE session at the LSTA Annual Conference next Tuesday.

October 19, 2017 - The LSTA published the new LSTA's Form of Credit Agreement. This is the LSTA's first complete credit agreement and is a revolving credit facility designed for use by investment grade borrowers.

October 17, 2017 - The LSTA published the LSTA’s Form of Fronting Letter Agreement.  The agreement may be used in connection with both committed and uncommitted transactions and describes the fronting by the Lead Arranger and the subsequent interaction between the Lead Arranger and the Co-Arrangers when certain primary allocations have not timely settled.

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