Although the loan industry has long looked at loans as being obligations that arise in a commercial lending relationship, which are therefore not securities under Federal and state securities laws, the law supporting this...more
6/2/2020
/ Blue Sky Laws ,
Collateralized Loan Obligations ,
Coronavirus/COVID-19 ,
Debt Securities ,
Fiduciary Duty ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Lenders ,
Loans ,
Reves Test ,
Secured Notes ,
Securities ,
Securities Act of 1933 ,
Securities Exchange Act ,
Syndicated Loans
On May 20, 2020, the Federal Reserve Board of Governors (the “Fed”) and the Federal Reserve Bank of New York (the “FRBNY”) announced the first subscription date of June 17, 2020 for funding under the Term Asset-Backed...more
5/28/2020
/ Asset-Backed Securities ,
Borrowers ,
Capital Distributions ,
Certification Requirements ,
Collateral ,
Coronavirus/COVID-19 ,
Federal Loans ,
Federal Reserve ,
FRBNY ,
Issuer Eligibility Criteria ,
Master Loan and Security Agreement (MLSA) ,
Sponsors ,
Stock Repurchases ,
Term Asset-Backed Securities Loan Facility (TALF) ,
Term Sheets
On May 12, 2020, the Federal Reserve Board of Governors (the “Fed”) and the Federal Reserve Bank of New York (the “FRBNY”) released an updated term sheet (the “New Term Sheet”) and Frequently Asked Questions (the “TALF FAQs”)...more
Mark Twain is often misquoted as saying "History never repeats itself, but it often rhymes." Whoever said them, these words certainly come to mind in the current economic crisis brought about by the COVID-19 pandemic....more
5/2/2020
/ Borrowers ,
CLO Indenture ,
Collateralized Loan Obligations ,
Coronavirus/COVID-19 ,
Default ,
Distressed Debt ,
Equity Securities ,
Financial Crisis ,
Insolvency ,
Lenders ,
Market Participants ,
Trading Restrictions
On April 9, 2020, the Federal Reserve Board of Governors (the “Fed”) released an updated term sheet (the “Updated Term Sheet”) for the Term Asset-Backed Securities Loan Facility (“TALF”) program. While the Updated Term Sheet...more
No Good News, but No Bad News Either -
On 16 October 2019 the European Commission (EC) adopted a delegated regulation supplementing Regulation (EU) 2017/2402 (the Securitisation Regulation) and setting out the final...more
10/31/2019
/ Collateralized Loan Obligations ,
Disclosure ,
EU ,
European Commission ,
European Securities and Markets Authority (ESMA) ,
Final Rules ,
Investors ,
Market Participants ,
Originators ,
Regulatory Standards ,
Securitization ,
Securitization Standards ,
Special Purpose Entities ,
Sponsors ,
Technical Standards ,
Transparency
The staffs of the Securities and Exchange Commission’s Division of Corporation Finance, Division of Investment Management (IM Division), Division of Trading and Markets, and Office of Chief Accountant (collectively, Staff) on...more
9/25/2019
/ Adjustable Rate Financial Products ,
Alternative Reference Rates Committee (ARRC) ,
Banks ,
Benchmarks ,
Broker-Dealer ,
Contract Amendments ,
Contract Terms ,
Derivatives ,
Division of Corporate Finance ,
Division of Investment Management ,
Division of Trading and Markets ,
FASB ,
Federal Reserve ,
Financial Conduct Authority (FCA) ,
Financial Institutions ,
Financial Regulatory Agencies ,
IASB ,
ICE Benchmark Administration (IBA) ,
Insurance Industry ,
Interest Rates ,
Investment Adviser ,
Investment Companies ,
Libor ,
Market Participants ,
Modification ,
Policies and Procedures ,
Secured Overnight Funding Rate (SOFR) ,
Securities and Exchange Commission (SEC) ,
Transitional Arrangements
The new Japanese Risk Retention Rules will lead to increased loan and collateral manager due diligence by Japanese investors but not wholesale changes to the CLO market.
Background -
On March 15, 2019, the Japanese...more
On December 28, 2018, the Japanese Financial Services Agency (the “JFSA”) published a number of notices detailing proposed changes in the regulatory capital requirements applicable to Japanese banks and certain other...more
In an eagerly anticipated (and much speculated upon) decision, a three judge panel of the United States Court of Appeals for the District of Columbia Circuit (“DC Circuit Court”) issued a unanimous opinion on Friday, February...more
2/23/2018
/ Appeals ,
Asset-Backed Securities ,
Collateralized Loan Obligations ,
Dodd-Frank ,
Final Rules ,
Fund Managers ,
Lack of Authority ,
Loan Syndication and Trading Association (LSTA) ,
Reversal ,
Risk Retention ,
Vacated
The staff of the Division of Corporate Finance (the “Staff”) of the U.S. Securities and Exchange Commission issued an interpretive letter (the “Interpretive Letter”) to Sancus Capital Management LP and its affiliates (“Sancus...more
Over the last year and a half, asset managers of collateralized loan obligations (“CLO Managers”) have been focused on developing various strategies to enable them to comply with the retention requirements of the final U.S....more
8/17/2016
/ Affiliates ,
Asset-Backed Securities ,
Capital Raising ,
Collateralized Loan Obligations ,
Disclosure Requirements ,
GAAP ,
Investor Protection ,
Residual Interest ,
Risk Retention ,
Safe Harbors ,
Securitization ,
Valuation
After many ups and downs, one might have thought that EU risk retention was done and dusted, but it looks like there may be a few more twists and turns.
On 6 June 2016, the draft Legislative Resolution from the...more
The European Commission published a draft regulation on a European framework for simple, transparent and standardised securitisation on 30 September 2015 (the “Draft Regulation”). The Draft Regulation aims to achieve a better...more
10/8/2015
/ Capital Requirements ,
Collateralized Loan Obligations ,
Commercial Loans ,
Disclosure Requirements ,
Draft Guidance ,
Due Diligence ,
EU ,
Investors ,
Lenders ,
Originators ,
Risk Retention ,
Sanctions ,
Securitization ,
Securitization Standards
Following Dechert’s Legal Update published on 14 September 2015, we have had sight of an updated draft of the proposed EU legislation on securitisations. The updated draft shows signs that regulators have taken on board some...more
The Financial Times published leaked drafts of proposed EU legislation on securitisations on August 25.1 The draft regulations, which would be directly effective in EU member states if adopted, propose changes to the current...more
In anticipation of the effective date of the Final Rule on December 24, 2016 (early Christmas gift?), CLO market participants have been constructing solutions that allow collateral managers to raise the capital necessary to...more
Since the release of the final U.S. risk retention rule (the “Final Rule”) in October 2014, CLO market participants have been grappling with its ramifications and working to devise solutions that permit collateral managers to...more
7/29/2015
The Bank of England (“BOE”) and European Central Bank (the “ECB”) recently published a joint response1 to the report and short opinion issued late last year by the European Bank Authority (“EBA”) on how to improve the...more
Since its initial release we have received numerous inquiries from market participants (clients and non-clients alike) concerning the meaning and ramifications of the final U.S. risk retention rule (the “Final Rule”) on...more
The European Banking Authority (EBA) published a report, and a short opinion, on how to improve the functioning of the securitization markets, as previously requested by the European Commission. The EBA voiced its support, in...more
The federal regulatory agencies responsible for implementing regulations under The Dodd-Frank Wall Street Reform and Consumer Protection Act finalized rules for risk retention requirements in CLO transactions (the “Final...more
Predicting enforcement of the final rule regarding U.S. risk retention is an uncertain task. This OnPoint is designed to provide guidance on possibilities related to consequences of non-compliance, enforcement approaches by...more
We will leave the hand wringing and teeth gnashing to others. We expect there will be a lot of that in the days ahead. We have had our say on the misguided premises and tortured statutory interpretation underpinning the final...more
The European Parliament has adopted Commission Delegated Regulation (EU) No 625/2014 of 13 March 2014, relating to Articles 404-410 of the Capital Requirements Regulation (CRR), which replaced the legislation referred to as...more