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ABS East: Death, Taxes and LIBOR Cessation

“Some say only two things in life are guaranteed: death and taxes. But I say there are actually three: death, taxes, and the end of LIBOR.” – John Williams, President Federal Reserve Bank of New York, September 23, 2019.

Operationalizing the LIBOR Transition

This presentation was done at the 25th Annual ABS East Conference that took place in Miami, FL.  It was presented by our very own Ellen Hefferan along with Linc Finkenburg of Perkins Cole, Nitish Idnani of Deloitte & Touche LLP, Ben Jordan of Wilmington Trust and Cindy Tjoe of KPMG LLP.  We discussed how one […]

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 – 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: December 6, 2019

This week, we revise our LIBOR deadline from 12/31/21 to 3Q20. (Well, technically, that was the FCA…and just for Stg LIBOR.) We review the secondary trading market in October (and hint toward November) and recap the latest on ESG and ratings. Finally, we remind you that we are now offering members a weekly LIBOR Q&A […]

Sustainability-Linked Loans: Financing the Green Transition

This practice note provides an overview of sustainability-linked loans (SLL). Sustainability-themed debt instruments represent one response of the financial community to the need to channel capital towards facilitating a carbon transition. A Lexis Practice Advisor Practice Note by Amara Gossin, Barclays and Robert Lewis, Sidley Austin

ESG and Cyber in Credit Ratings Presentation

The focus on environmental, social, and governance (ESG) issues is intensifying across financial markets – the loan market included. This presentation was done by Jim Hempstead, Managing Director, Global Project & Infrastructure Finance and Brendan Sheehan, VP-Senior Analyst-Environmental, Social & Governance both from Moody’s Investor Service.

Secondary Trading & Settlement Monthly: October Executive Summary

November was a solid month in the secondary loan market, with S&P/LSTA Leveraged Loan Index (LLI) returning 0.59%. October, however, was a different story. Secondary loan trading volume spiked 19% in October to a six-month high of $64 billion. This followed a two-month stretch where volumes fell below $60 billion per month.

Credit Ratings and ESG (Part 1)

As 2019 comes to a close, the rise of environmental, social and governance (ESG) significance in financial markets has been undeniable. In Europe, this trend is quite established, but over the last two years it has jumped the pond and there is now significant ESG interest by U.S. investors.