March 2016

Financial downtrend chart and red pencil. Selective focus

The Federal Reserve announced last Wednesday that it is leaving the federal funds rate where it is, for now.  While the United States is pondering interest rate hikes, other parts of the world are plunging further into negative territory.  Last Thursday, in an attempt to bolster Europe’s weakening growth and spur inflation, the European Central Bank (the “ECB”) lowered its deposit rate by another 0.1%, pushing its deposit rate down to -0.4%.

With other central banks lowering rates into the negative, will the U.S. follow? Why is this happening? What could go wrong? How will this affect our banks?  Click through for three things you should know about negative interest rates.Continue Reading Three Things You Should Know about Negative Interest Rates

Over the past few years, the ABS Vegas conference has been the place for industry participants to congratulate each other on a job well done (most recently on a record-setting 2015 for CLO primary issuance), meet-and-greet with clients and generally unwind, making sure to sprinkle a few “important” meetings across the three-day span.  However, following a January and February where CLO primary issuance was down well over 50% year-over-year with little sign of an upturn before the conference, most of us went into ABS Vegas 2016 with uneasy feelings.
Continue Reading Observations from ABS Vegas: The CLO Perspective

Last week, the House Committee on Financial Services reported out the Preserving Access to CRE Capital Act of 2016 (the “bill”) in a remarkably bipartisan sort of way (paving the way for: “Well, yes, I did vote for it, but then I voted against it.”).  The bill, which was drafted and backed by CREFC, would exempt certain single asset/single borrower securitizations from the risk retention requirements, would allow the B-piece buyer to acquire the risk retention piece in a senior/subordinate capital structure and loosen the criteria for a qualified commercial real estate loan to make it more useful for CMBS players endeavoring to meet the risk retention requirements of Dodd-Frank.  See Dechert’s OnPoint for a more detailed description of the bill.
Continue Reading Flash: Congress Fixes the CMBS Risk Retention Problem (Just Kidding)