July 12, 2022 - On July 11th, the LSTA kicked off its second annual Summer Series. The program is a two week course that is being held virtually again this year and is designed as an introduction to the loan market. The first class held on July 11th focused on the loan market itself.
The remainder of the first week will be devoted to understanding the basic provisions of a typical credit agreement. Next week, classes will address the middle market, the secondary trading market, trading & settling loan trades, sustainability linked loans, and the regulations impacting the loan market.
Ioana Barza, Head of Market Analysis at Refinitiv LPC, launched the LSTA series on July 11th by presenting the Market Overview. A brief survey of the attendees revealed that more than 80% were unfamiliar or only a little familiar with the loan market. US syndicated lending has enjoyed impressive growth for the past 35 years reaching a record US$2.9 trillion in 2021 so there was much to cover. The basics of the market were explained, including underwritten and best efforts deals, reasons for borrowings, as well as the differences between term loans and revolvers. The basics of “all in yield” (base rate, spreads, and OID) were also covered, and newcomers were taught about the attractive features of the loan asset class, ie, a senior secured floating rate class. Comparisons with the bond market were also drawn. The biggest themes in the loan market today: the transition to SOFR and the evolution of sustainability linked lending were also highlighted and will be covered in greater depth during sessions next week.
The Summer Series is ideal for new entrants or those with one or two years’ experience in the loan market. With more than 800 continuing to participate in the credit agreement portion of the series, there is a real need for this type of introductory level course. The Summer Series is open to all LSTA members, and there is no cost to attend. Attendees participating this week are encouraged to purchase a copy of The LSTA’s Complete Credit Agreement Guide which will be the textbook for several sessions. Click here for the Market Overview slides and here for the replay. Click here to register for the remaining sessions.