As highlighted in Nomura’s Special Topics on January 24th, basis risk has been on CLO managers’ (and equity holders’) minds. While the focus generally has been on one-month/three-month LIBOR basis, basis questions also have emerged in the SOFR space.
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On Deck…The Volcker Rule Re-Proposal is Coming
The Federal Reserve Board (the “Fed”) announced this week that it will meet on Thursday, January 30th, to consider a proposed rulemaking regarding the Volcker Rule.
LSTA Secondary Trading 2019 Executive Summary
After recording consecutive record highs during the fourth quarter of last year ($211 billion) and again during the first quarter of this year ($212 billion), secondary loan trading volumes decreased 10% in the second quarter, to $191 billion.
Lee Shaiman Publishes Exclusive Op-Ed in Real Clear Markets
LSTA Executive Director Lee Shaiman debunks many of the myths and false narratives about the leveraged loan marketplace in this exclusive op-ed published in Real Clear Markets.
UK LIBOR: Regulators Speak, Industry Strategizes
“The intention is that sterling LIBOR will cease to exist after the end of 2021. No firm should plan otherwise.”
LSTA Publishes its Second Credit Agreement
Today the LSTA published a new addition to its document library – the LSTA’s Form of Credit Agreement – Investment Grade Term Loan. This form is designed for a standalone term loan for investment grade borrowers.
LSTA’s Recap of Brexit: Britain To Withdraw
Today, the LSTA hosted a webinar, “Brexit: Britain to Withdraw on January 31st”, presented by Clifford Chance Partner, Simon Crown. The UK has been stuck in a holding pattern since the 2016 Brexit referendum, but that was broken by the results of the UK’s General Election, which took place on December 12th, when the UK’s Conservative Party were returned to government with a strong majority in the House of Commons.
The Borrower’s Argument for Hardwired Fallbacks
According to recent research by Fitch, borrowers should have a compelling appetite for “hardwired” LIBOR fallbacks. The downside risk of the amendment fallback – ending up in Prime – may be more likely than borrowers appreciate and the cash flow and ratings implications could be material. We discuss all below.
Credit Ratings and ESG (Part II)
In a recent webcast “ESG and Cyber in Credit Ratings”, Jim Hempstead, Managing Director, Global Project & Infrastructure Finance and Brendan Sheehan, VP-Senior Analyst-Environmental, Social & Governance, presented on how Moody’s Investors Service incorporate ESG considerations in Moody’s credit ratings.
ESG Hits the Mainstream
We all saw the increase in media coverage last year of the implications of ESG (Environmental, Social and Governance) factors in the financial markets and that trend has only been accelerating. Indeed, ESG has hit the mainstream. Perhaps nowhere was that as clearly on display as in Larry Fink’s CEO Letter this week.
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