Episode 25: 10 Factors That May Hinder a Contractor’s Ability to Repay Its Bank Loans and Threaten Its Existence
The U.S. Supreme Court declined to hear an appeal of the Second Circuit Court of Appeals’ ruling in Kirschner v. JP Morgan Chase Bank. Last August, the Second Circuit Court of Appeals held in Kirschner that syndicated term...more
The order marks the end of the Kirschner case, which had threatened to expand US securities regulation to syndicated loans. The US Supreme Court has denied a petition for certiorari review in the Kirschner case, in which...more
One of the most important CRA responsibilities for Intermediate-Small Banks and Large Banks is "Community Development Lending". But while Community Development Lending is critically important, there is very little information...more
On August 24, 2023, the Second Circuit Court of Appeals determined in the highly anticipated case, Kirschner v. JP Morgan Chase Bank N.A., et al., that syndicated term loans are not securities. The Court upheld the district...more
In February 2023, the Loan Market Association (LMA), the Asia Pacific Loan Market Association (APLMA) and the Loan Syndications and Trading Association (LSTA) re-issued the Sustainability-linked Loan (SLL) Principles and the...more
Summary - As a result of the shift from LIBOR to the Secured Overnight Finance Rate (SOFR), borrowers who use interest rate swaps or options to manage interest rate risk may be asked to pay extra to maintain a hedge under...more
Stubborn inflation, ongoing interest rate hikes and the banking crisis in the US and Europe have slowed activity across global loan markets at the start of the year, but there are signs that loan issuance may start rebounding...more
This article sets out certain key considerations specific to the Latin American loans market that may arise in transitioning legacy USD LIBOR loans to SOFR and supplements our earlier article published on December 6, 2022 on...more
While US dollar (USD) LIBOR has all but vanished from new-issue loans in 2022, the vast majority of the US loan market is comprised of legacy transactions that remain tied to the retiring rate. For every US institutional loan...more
Leveraged loan activity slows in the US, Europe and APAC as a volatile economic backdrop and the rising cost of debt starts to weigh on issuance - Leveraged loan markets have been buffeted by a challenging macroeconomic...more
The U.S. loan market continued to cool in the third quarter, amid an uncertain economic outlook. Geopolitical risks, rising interest rates and a continued threat of recession have caused lenders to focus on credit quality as...more
In light of continued negative macroeconomic trends—including but not limited to meaningfully higher global inflation, tightening monetary policy by central banks, volatile energy prices, slowing consumption, continued supply...more
Mining & metals companies can take advantage of low prices in the leveraged finance markets to manage their liabilities amid the expected recession. The current economic environment creates opportunities for the mining &...more
As Environmental, Social and Governance (“ESG”) trends continue to evolve, the industry continues to publish best practices and guidance to aid in the development of this rapidly growing market. Most recently, the Loan...more
On July 29, 2021, the Alternative Reference Rates Committee (“ARRC”) of the Federal Reserve formally announced and recommended1 CME Group’s forwardlooking Term Secured Overnight Financing Rate (“Term SOFR”) rates.2 Important...more
Refinancing activity supports a double-digit year-on-year uptick in leveraged loan issuance in the United States and Europe, while mega-deals dominate in the Asia-Pacific region Leveraged loan markets in the United States,...more
In the last week we have had a very big development in the LIBOR transition: The ARRC has now formally recommended forward-looking Secured Overnight Financing Rate (SOFR) term rates. This is big news for your fund finance...more
Abundant liquidity, a red-hot refinancing market and improving credit ratings combined through the first half of 2021 to limit defaults and ease any near-term pressure on the balance sheets of US borrowers. Borrowers...more
This is an update to a previous post. This update highlights the formal endorsement of Term SOFR by the ARRC, expands the discussion to include Ameribor and dives more deeply into the issues associated with Term SOFR swaps...more
Wednesday, the ARRC announced (HERE) the expectation to endorse CME’s Term SOFR in late July or early August. One of the bigger pieces to this announcement is the announcement that U.S. regulators will also permit Term SOFR...more
Latin American loan issuance has felt the effects of COVID-19 disruptions, but lenders have remained open for business as borrowers turn to bilateral loan revolving credit facilities for liquidity. Loan markets in Latin...more
At long last, the FDIC has issued its final rule codifying the “valid when made” doctrine. The rule was finalized on June 25, 2020, and clarifies that the interest rate lawfully assessed by an originating depository...more
On April 9, 2020, the Federal Reserve Board (“Fed”) announced details of its Main Street Lending Program through which it will purchase up to $600 billion in loans from eligible lenders using funds appropriated to it under...more
Many clients have been asking questions relating to the current market challenges with VRDOs and CP (high interest rates and lack of demand). The discussion below was drafted to provide some basic information and analysis...more
On March 9, the Loan Syndications and Trading Association (“LSTA”), the association for the syndicated loan market in the United States, announced that it members are taking multiple steps to ensure business continuity and a...more