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DC Court of Appeals Ruled in Favor of LSTA in Risk Retention Lawsuit

This morning, the Court of Appeals for the DC Circuit ruled in favor of the LSTA in its lawsuit against the SEC and the Federal Reserve Board, concluding that managers of collateralized loan obligations (CLOs) are not subject to the credit risk retention rules mandated under the Dodd-Frank Act.

DC Court of Appeals Ruled in Favor of LSTA in Risk Retention Lawsuit

This morning, the Court of Appeals for the DC Circuit ruled in favor of the LSTA in its lawsuit against the SEC and the Federal Reserve Board, concluding that managers of collateralized loan obligations (CLOs) are not subject to the credit risk retention rules mandated under the Dodd-Frank Act.

Risk Retention Litigation: The Uncertainty Principle

Many market participants have been closely following the LSTA’s risk retention lawsuit against the SEC and the Fed and many rumors have come to our attention concerning the status of the case.  Specifically, we have been hearing that the decision would come out this week (it did not) and that we will prevail (we may or we may not).  The following brief summary is meant to describe where we are now and explain what is actually likely to happen in the coming days or weeks.

Risk Retention Lawsuit: The Government Strikes Back

On June 7th, the Board of Governors of the Federal Reserve and the SEC filed a responsive brief in the LSTA’s ongoing lawsuit relating to risk retention for CLO Managers.  The LSTA has alleged that the agencies overstepped their authority when they determined, contrary to the statutory language, that CLO managers were “securitizers,” subject to the risk retention requirements under Section 941 of Dodd-Frank and erred by tying the required amount of first-loss horizontal risk retention to 5% of the fair value of a CLO rather than something closer to its credit risk as mandated by the statute.

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LSTA Newsletter – October 18, 2019

This week, we start by announcing that the LSTA is developing a “SOFR Compounded in Arrears” concept credit agreement. It is one more tool to help members internalize what a SOFR Loan Market might look like. Next, we provide an updated suite of documents on Primary Delayed Compensation. Finally, we offer a brief update on LSTA […]

Flashforward: LSTA Releases Draft SOFR “Concept Credit Agreement”

On October 1st the LSTA took the next step in its efforts to educate market participants on replacement benchmarks by distributing a draft “concept credit agreement” referencing a compounded average of daily SOFRs calculated in arrears (“Compounded SOFR in Arrears”).

LSTA Advocacy Update

Over the past two weeks the LSTA has continued its political advocacy with legislators and regulators on issues of importance to the loan market. Last week, Meredith Coffey and Elliot Ganz, Co-heads of the LSTA’s Public Policy Group, had the opportunity to join Congressman Greg Meeks (D. NY) for a free-ranging discussion over breakfast.

Primary Delayed Comp: Revised Drafts Released

The LSTA released revised drafts this week of the LSTA trading documents to be used in connection with the new Primary Delayed Compensation Protocol. Below are links to the clean drafts and blacklined documents marked to show changes since the last versions sent to you for your review.