Pages from Week_in_Review 01.31.20 - Revised

This week, we start out with good news and get better from there! First, our initial analysis suggests that the proposed Volcker Rule acknowledges that CLO debt securities are not ownership interests – and this should reduce CLO risk from the Kirschner case. (But there still are big Kirschner fish to fry.) Second, CLO managers and equity have been bedeviled by LIBOR basis; we demonstrate mathematically that SOFR basis is not a big deal. Finally, there’s big buzz around direct lending, and we start demystifying this mysterious asset class.

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On Monday, February 24, U.S. stock indices recorded their worst decline in two years on concerns the coronavirus outbreak would continue to spread and begin to undermine global economic growth. In the loan market, bid levels indiscriminately dropped 18 basis points to begin the week, which worsened February’s price decline to 32 basis points.

LSTA Newsletter: February 21, 2020

This week, we start off in the markets, comparing defaults (low but rising), leverage (high but edging down), and yields (low and lowering). We move to LIBOR, announcing the new SOFR Index and Averages, and reminding members of our weekly call. We shift to the courts, providing an update on our Madden vs Midland amicus. […]

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