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Primary Delayed Compensation: Drafts Released

Yesterday, the LSTA released drafts of the LSTA trading documents to be used in connection with the new Primary Delayed Compensation Protocol. Below, please find links to the clean drafts and blacklines marking the changes to the current versions of the Par/Near Par Trade Confirmation and Standard Terms and Conditions for Par/Near Par Trades.

Primary Delayed Compensation Protocol

The Protocol applies to a “Primary Allocation” which is an allocation of new money by a syndicate desk in connection with either (i) a new issue syndication or (ii) an amendment of an existing Credit Agreement.  In addition, the Protocol affects when-issued secondary trades by (i) changing what constitutes an Early Day Trade and (ii) […]

Primary Delayed Compensation – Will You Be Ready?

If you are looking for artwork that would both decorate your office space and also would help implement the new Primary Delayed Compensation Protocol, look no further! The LSTA has developed flowcharts focusing on Primary Allocations, Early Day Trades and Post Funding Trades that illustrate how Delayed Compensation is to be applied on a step-by-step basis. And if a picture is not necessarily worth a thousand words, we’ve also provided the Primary Delayed Compensation Protocol together with a Glossary of Terms.

KYC Panel at The Ops Conference

An essential part of the LSTA’s proposed “primary delayed compensation” regime is the requirement that agent banks and primary lenders complete all “onboarding requirements” in a timely manner.Given current loan market practices, which seem to be inconsistent and indeed onerous, often far exceeding what is required under US law, this may prove challenging for many loan market participants, as became apparent during the KYC panel, “Know Your Customer – Preferable Before the Ready Date” at the LSTA’s Operations Conference in NYC on April 9th.

Are You Ready for CECL?

Who is CECL and why is everyone talking about him? This week, we explain all. On Tuesday, the LSTA hosted a webinar on the new Current Expected Credit Losses (“CECL”) accounting standard which goes into effect beginning in 2020 for public business entity SEC filers and 2021 for non-SEC filers.  Why should you care?  The new standard will change the way banks and other financial institutions account for expected credit losses.

CECL: The Road Ahead

CECL is the acronym du jour. But what is it, what will it mean for loans and what is the LSTA doing? We discuss all below.

All Eyes on MEIs

After much review and analysis by an LSTA Working Group, Markit Entity Identifier (“MEI”) Guidelines were published this week to clarify when an “MEI” will (and will not) be issued by IHS Markit to loan market participants. 

Operations Industry Initiative Survey: High Level Summary

In order to target, build and achieve greater operational efficiency for the loan market, and to have a better understanding of our members’ views on position reconciliation, FpML messaging, blockchain/distributed ledger technology, the LSTA, together with a small group of members representing dealers and buy-side institutions, put together an Operations Industry Initiatives Survey.   92 LSTA members completed the survey.

LSTA Data and Analysis: Measuring Progress

The LSTA’s big story of 2016 centered on the new Delayed Compensation Standard that went live in September.  So in this review, the Market Data and Analysis team wanted to spend all our time on settlement metrics which, after four months of data, look much improved. (Kudos to all those who’ve borne the brunt of change!)  But first, let’s put today’s figures in historical perspective.

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LSTA Newsletter: August 16, 2019

This week we cover LIBOR-Good News and Less Good News; Docs Terms of Use; Delayed Comp Docs Released; Loans Mag Announcement

Loans Magazine – Summer 2019 Edition

This edition provides members with valuable content on the latest developments in the syndicated loan market. An article from David Chmiel of Global Torchlight Limited which explores “Current Geopolitical Trends Impacting the Loan Market”. We continue with a series of articles on the many aspects of the LIBOR/SOFR transition, an analysis of the secondary loan […]

LIBOR Fallbacks: Good News… and Less Good News

There is good news – and less good news – on LIBOR fallback language in cash products like loans, FRNs and CLOs. On the good news front, it looks like most cash products are now including fallback language in new deals. This is critical because many instruments will be outstanding when LIBOR ends after 2021, and if they don’t have good fallback language, there could be contract frustration (and litigation). However, on the less-good-news front, the fallback language is not always consistent (which may lead to a lot of work to determine exactly how each instrument would fall back) or workable en masse (which may lead to traffic jams as everyone tries to amend their deals at the same time). We discuss the fallback status of FRNs and loans below. (And we’d gently remind readers that several CLOs have gone “hardwired”, per LCD and Covenant Review).

Primary Delayed Compensation: Drafts Released

Yesterday, the LSTA released drafts of the LSTA trading documents to be used in connection with the new Primary Delayed Compensation Protocol. Below, please find links to the clean drafts and blacklines marking the changes to the current versions of the Par/Near Par Trade Confirmation and Standard Terms and Conditions for Par/Near Par Trades.

Primary Delayed Compensation Protocol

The Protocol applies to a “Primary Allocation” which is an allocation of new money by a syndicate desk in connection with either (i) a new issue syndication or (ii) an amendment of an existing Credit Agreement. In addition, the Protocol affects when-issued secondary trades by (i) changing what constitutes an Early Day Trade and (ii) […]

FAQs: The LSTA Trading Documents’ New Terms of Use

As we previously noted, on May 17, 2019, the LSTA published a new suite of U.S. secondary market trading documents. In conjunction with the rollout of the new documents the LSTA changed the Terms of Use applicable to counterparties who use those documents. Since then, we’ve received many questions about the new Terms of Use and below we answer many of those questions.