May 2020

While it seems like the COVID pandemic has taken over every waking moment of our lives, the impending end of LIBOR marches ever onward.  All signs point to a termination date for the troubled benchmarks at the end of 2021, pandemic be damned.

The purpose of this post is not to discuss the road to transition so far, though if you’d like to take a trip down memory lane, here is what we have seen. Instead, we wanted to bring your attention to the fact that, whilst the UK Financial Conduct Authority’s (FCA) momentum continues, COVID has created some bumps in the road, even on the journey to the end of LIBOR.Continue Reading LIBOR – The UK Beat Goes On

Last Friday, Law360 published its interview with Crunched Credit’s own Rick Jones as part of its Coronavirus Q&A series. In his interview, Rick discusses the effects COVID-19 has had on the commercial mortgage-backed securities market, reflects on how the current financial climate compares to that of the Great Recession, and contemplates the future of capital…

COVID-19 has driven anxiety over the LIBOR transition right off almost everyone’s top-of-mind list and yet the crisis is taking no notice of that lack of regard and soldiering on.  The ARRC continues to beaver away, generating guidance and advice and otherwise proselytizing the need to get on with it and be ready for transition on January 1, 2022.

But are the markets listening?  Look at our ardor!  Except for special situations, the use of SOFR, to date, has been a political and not an economic decision for those who have elected to use it.  There is little take-up in the real world and little enthusiasm for doing so.  And what’s with the huge whoops a few weeks ago when SOFR’s March to the Sea was interrupted when the Fed backed off using SOFR in the Fed’s new $6 billion aid program for small and mid-size businesses?  Run away! Run away!  Back to LIBOR!Continue Reading LIBOR: The Monty Python Parrot of Finance

Last week the New York Supreme Court answered an SOS from a borrower seeking a TRO to prevent a sale under the UCC in NYC that was scheduled to take place on May 1st.  For more information on this alphabet soup, read our OnPoint about new potential pitfalls for mezzanine lenders seeking to…

My last commentary, Playing with Broken Toys in Coronavirus Land, touched on the notion that sometimes following rules can guarantee a bad outcome.  I’ll leave more important musings about ethics and morality aside here (I still don’t have a clue about what Kant was nattering on about) and focus on the more mundane question of whether one should do what a contract says when the contract conflicts with the exercise of good judgment.
Continue Reading “I Was Just Following Orders”