Search Results

Total Results: 

US Tax Reform and the Loan Market

The Tax Cuts and Jobs Act enacted at the end of 2017 has impacted businesses and individuals and alike. After its passage, the LSTA hosted Latham & Watkins for a webcast on the projected impact of tax reform on financings. While predictions could be made then, much of the detail was left to implementing guidance and was then unknown. Last week, roughly 18 months later, Jiyeon Lee- Lim, Elena Romanova and Jane Summers, partners at Latham & Watkins, returned to give an update now that some of those details have been filled in.

Revisiting the Impact of Tax Reform on the Loan Market Presentation

Revisiting the Impact of Tax Reform on the Loan Market presented on June 13, 2019 introduced by Tess Virmani, Associate General Counsel & SVP, Public Policy of the LSTA and presented by Jiyeon Lee-Lim, Partner, Elena Romanova, Partner, Jane Summers, Partner all at Latham & Watkins.

Taxing Questions (and the Loan Market)

Since the tax reform was signed into law last December, LSTA members have wondered what it means for the loan market (and for themselves). We have begun to answer at least part of the first question. On Thursday, January 30, 2018, Jiyeon Lee-Lim, Elena Romanova and Jane Summers, partners at Latham & Watkins, laid bare the new tax rules generated by the Tax Cuts and Jobs Act. While the Act includes important changes impacting businesses and individuals, the panelists highlighted those new tax rules particularly relevant for financings.

The Tax Plan Cometh

As the tax reform process grinds on in Washington, Wall Street – and Main Street – are examining how it affects both individuals and companies. (Spoiler: There appear to be winners and losers on both streets.) This week, Moody’s published their third installment of “Debt and Taxes”, which discussed how the tax reform bill could affect different types of companies. We discuss their analysis – and companies’ reaction to the bill – below.

Taxing Times? Issues to Consider in the Leveraged Loan Space

On November 9th, a week after the House released its tax reform bill, the Senate released its bill. To be sure, getting any bills through Congress has been challenging this year. But if tax reform as proposed passed – and Gary Cohn on Tuesday reiterated that it would – it could dramatically impact the U.S. tax system and tax payers.  Replacing our homeowner hat with our LSTA hat, we spent some time pondering the impact of the tax bills on the corporate loan sector – and the LBO subsector in particular. We focus on the intersection of interest deductibility, lower corporate taxes and expensing of capex. While this is far from simple, we fortunately got some help along the way from Barclays, CreditSights, Moody’s, Akin Gump and Debevoise.

Regulatory Watchlist

The next few weeks may be chockablock with regulatory goings-on that potentially affect the loan market. We provide a watchlist below, a recent presentation (attached) and will analyze each issue as details emerge.

Become a Member

Membership in the LSTA offers numerous benefits and opportunities. Chief among them is the opportunity to participate in the decision making process that ultimately establishes loan market standards, develops market practices, and influences the market’s direction.

View a list of all members.

Our Partners

cusip-global-services-vector-logo.svgFitch Group logoRefinitiv-(March-2019)SP-Global-Market-Intelligence

Search Results by Relevancy

The Volcker Rule Amendments: What Do They Mean for CLOs

Earlier today the Federal Deposit Insurance Company (FDIC) and the Office of the Comptroller of the Currency (OCC) separately approved final rules amending rules originally published in November 2013 that implemented the Volcker Rule. Importantly, today’s amendments do not affect loans and CLOs. The FDIC signaled that amendments to the part of the Volcker Rule pertaining to CLOs would be forthcoming sometime in the future. Today’s amended rules are available here.

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) […]