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Loan Syndications and Trading News

June 21, 2018 - After a successful legal challenge, today the Fifth Circuit Court of Appeals issued a mandate vacating the Department of Labor’s Fiduciary Rule.  After receiving much attention since Trump took office and being subject to a number of court challenges, the Fiduciary Rule as adopted in April 2018 will no longer apply.

June 21, 2018 - On June 13th Linda Filardi (Capital One), Alex Spiro (PNC) and Jane Summers (Latham & Watkins) delivered a webcast presentation on Current Deal Terms for Corporate Borrowers and Other Hot Topics. Before highlighting some current market issues, the presenters compared deal terms across the “pro rata”/Term Loan A (TLA) and Term Loan B (TLB) products noting that many of the differences in terms are a result of the different institutions that act as lenders (banks in the case of TLAs and institutional investors in the case of the TLBs) as well as the need for liquidity in the TLB product.

June 21, 2018 - U.S. secondary loan trading volume increased a staggering 20% in May to a 15-month high of $63.6 billion.  The sharp rise in activity was driven by a $21 billion surge in S&P/LSTA Leveraged Loan Index (LLI) Outstandings, which now sit north of $1.03 trillion.  Across 2018, the LLI has experienced a 7% rise in both outstandings (+$69 billion) and facility count (+86 loans).  Today, the index is tracking a record 1,261 loans.  But while the LLI has expanded in size, year-to-date trading volumes ($281 billion) are actually down 3% from the same period last year ($290 billion).

June 21, 2018 - Reading a recent Reuters article on LSTA Chairwoman, Mitali Sohoni, prompted me to reflect on the importance of volunteer service to our industry. Mitali is an extraordinary person and her commitment to our market and the LSTA is exemplary; she absolutely deserves to be lauded.

June 20, 2018 - As LSTA members undoubtedly know, LIBOR potentially will cease after the end of 2021. So how do the rating agencies think about potential LIBOR cessation and its impact on credit? As Moody’s reported in May, “Uncertainty over future of LIBOR is broadly credit negative”. That said, the rating agency is not necessarily opposed to a post-LIBOR world; instead, Moody’s explains that full impact of a potential LIBOR cessation is unclear – and uncertainty in itself is a credit negative. This uncertainty arises for a number of reasons.

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