On August 28, 2013, six federal regulatory agencies (among them, the SEC, Federal Reserve, OCC and the FDIC (collectively, the “Agencies”)) released a 499 page second risk retention proposal (the “Second Proposal”). The Second Proposal covers risk retention for securitizers of all asset-backed securities, but also contains changes aimed directly at CLOs. For CLOs, the rules include both familiar provisions found in the first risk retention proposal (introduced in 2011) and new proposals, some of which are directed at alleviating the substantial burdens the Agencies themselves recognize the Second Proposal imposes on CLOs. Some of the proposals include new combinations of previously proposed forms of retention, new measurement metrics and holder eligibility criteria, hints at how grandfathering will be treated, a projected cash flow test for first-loss holders and an (likely ineffective) open market CLO option. The provisions outlined below do not reflect all changes found in the Second Proposal, but instead are meant to highlight some of the developments CLO participants may find important.Continue Reading Risk Retention Reproposal’s Impact on CLOs: Loan Arrangers Get Invited to the Party that No One Wants to Attend
September 2013
The European Bank Loan Trade Is Not Yet Done
By Rick Jones on
Here at Dechert, we have seen a slow but steady work stream over the past several years in assisting institutions in either buying or selling of pools of financial assets. Just recently, we advised Wells Fargo Bank in connection with its acquisition of a $4.5 billion performing pool of UK loans and the simultaneous financing of Lone Star’s acquisition of $1.5 billion NPL and SPL pool, all acquired from what had been Euro Hypo’s and now – Hypothekenbank Frankfurt. Needless to say, we would certainly love to see more. Continue Reading The European Bank Loan Trade Is Not Yet Done