The S&P/LSTA Leveraged Loan index (LLI) has returned 5.7% at the half-way point of 2019 – giving way to the best start of a year since the famed loan market rally of 2009. But 2019’s gains have not been just a straight shot higher nor have they outdone those produced by any of the other major asset classes – from equities through treasuries.
As we recently reported, the LSTA filed an amicus brief in a federal case coming out of the Millennium bankruptcy which is considering whether broadly syndicated term loans are securities for the purposes of federal and state securities laws. The LSTA argued that they are not and explained the materially negative consequences to borrowers and lenders were a court to reach the opposite conclusion. Recently, the banks completed the briefing in this case by filing a reply brief that reiterated their view that the term loan in that case is not a security.
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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.