The current administration’s legislative initiatives are largely bottled up in a split Congress, so the path toward achieving the White House’s policy priorities runs almost exclusively through the executive order and rule-making process and boy, have they worked it hard. But Santa is coming down the chimney delivering lumps of coal so often these days, … Continue Reading
While many of us may be sneaking in one final summer vacation, the ARRC showed no signs of a slowdown as they formally recommended the CME Term SOFR Rates. Issues with SOFR aside, it looks like the rate really is here to stay. Read more about the latest developments from Dechert’s LIBOR task force in their … Continue Reading
Sharia law prohibits interest, naturally putting financial minds to work on how to build structures around this religious prohibition. But a recent ruling has found that such investment agreements do not qualify for safe harbor provisions of the bankruptcy code. Shmuel Vasser breaks down the 100 page long complex opinion concisely and clearly sharing with us … Continue Reading
Regulators have been increasing their scrutiny of LIBOR transition efforts as they ramp up messaging stressing that the time to act is now. The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (OCIE) issued a National Exam Program Risk Alert to introduce a LIBOR Examination Initiative on the upcoming discontinuation of, and transition … Continue Reading
Last week, the U.S. Department of the Treasury released proposed rules providing tax guidance around various LIBOR replacement issues. Long anticipated. The defenestration of LIBOR will leave considerable broken glass in its wake. Perhaps just so the tax professionals wouldn’t feel left out, the end of LIBOR will create a series of tax problems. Very … Continue Reading
In an effort to advance the conversation around climate change within the CRE finance community, Jason S. Rozes and Nitya Kumar Goyal recently published Climate Change Impact on Commercial Real Estate Finance — What the Industry Needs to Know Today, which provides a great foundation for understanding how climate change affects our industry and identifies recent developments … Continue Reading
A recent decision out of the District Court for the Southern District of New York may bring greater certainty to the interpretation of what constitutes a “financial institution” in connection with the safe harbor in section 546(e) of the bankruptcy code. The decision, In re Tribune Fraudulent Conveyance Litig., 2019 U.S. Dist. Lexis 69081 (S.D.N.Y. … Continue Reading
A new OnPoint from Dechert’s Employee Benefits and Executive Compensation team discusses a recent ruling from a federal court in the Southern District of New York. There, a pension plan that had acquired notes issued by a vehicle invested in a pool of sub-prime residential mortgage-backed securities is arguing that the vehicle’s assets are “plan assets” … Continue Reading
On March 15, the day the Japanese Financial Services Agency (the “JFSA”) published its final risk retention rules, Dechert’s CLO team published an OnPoint discussing the new final Japanese risk retention rules and their impact on the CLO market. … Continue Reading
We’re all just back from CREFC and the mood was broadly constructive. (Don’t you love that word, “constructive”? When did “constructive” become a fancy way to say “good”?) We all went to South Beach this year wondering where the investors were, wondering whether the market was okay and wondering whether December was a blip or … Continue Reading
I don’t think risk retention is applicable to a direct issuance securitization. Many single asset, single borrower (SASB) transactions can be structured to avoid the need to retain risk under the Dodd-Frank Act and the attendant Risk Retention Rule. There. I’ve said it. Read on.… Continue Reading
For the past year or so, Dechert has been keeping a close eye on the marketplace lending industry and the tension between innovation, which portends the development of an entirely new non-banking financial space, and the instinctual reaction of the regulatory state to resist and restrict innovation. Earlier this summer, we published an OnPoint providing … Continue Reading
And now to return to our commentary a few weeks back about the stultifying impact of ill-thought through rules and regulations (at best) (Brexit has intervened). This is our Regulatory State which broadly attempted to pick winners and losers and modify market behavior, to get an engineered outcome by using the blunderbuss of proscriptive rules … Continue Reading
With apologies to George Dangerfield, who published The Strange Death of Liberal England in 1935 chronicling the collapse of the British Liberal Party prior to World War I, I’m borrowing his title for this commentary. Okay, bear with me. Regrettably, we may be witnessing something happening to our banking system which is somewhat reminiscent of … Continue Reading
We thought it would be useful to give a quick, interim update on the slow-motion train wreck that is our industry’s response to the upcoming effectiveness of the Risk Retention Rule. For those of you who have been blessedly snoozing under a rock these past couple of years, the Risk Retention Rule becomes effective on … Continue Reading
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 … Continue Reading
Just in case you set your copy down during the cocktail hour at the SFIG & IMN ABS Vegas 2016 Conference, here is our latest OnPoint: RMBS Risk Retention is Here. Click here for more information about Risk Retention.… Continue Reading
The recently enacted Bipartisan Budget Act of 2015 amended the existing rules governing tax audits of partnerships in the U.S. Who Does this Effect and When? The new rules primarily impact partnerships with more than 100 partners and will generally apply to partnership taxable years after December 31, 2017. A partnership may elect to apply the new rules … Continue Reading
That whole alternate universe thing, the conceit of so many sci-fi novels, is clearly not merely the product of fevered minds. It’s real. Or, at least it seemed awfully real after having been at the CREFC meeting in Miami and the MBA/CREF meeting in Orlando during the past month.… Continue Reading
The courts have been busy this year, handing down several key decisions which have affected the structured finance landscape. Among them are Omnicare, Ace Securities and Madden. In the grand tradition of the Golden Turkey Awards due out later this month (and without stealing any of their thunder), this post is a quick review of … Continue Reading
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 support investments required by the Final Rule. We have seen an increased use of a hybrid structure that has been referred … Continue Reading
What happens when a debtor, whose loan is pooled and securitized, files for bankruptcy? Are payments made to investors recoverable as fraudulent transfers or preferences? Until recently, no published court opinion addressed this issue. However, in what is sure to be welcome news for investors in securitization vehicles, late last month, a Bankruptcy Court in … Continue Reading
Following on the heels of last year’s bi-partisan “Housing Finance Reform and Taxpayer Protection Act of 2013”, which was introduced into the Senate by Senators Corker and Warner, a similar bill was recently introduced in the Senate that could result in the wind-down of Fannie Mae and Freddie Mac. Under the bi-partisan “Housing Finance Reform … Continue Reading
A bill was recently introduced in the Senate that could result in the wind-down of Fannie Mae and Freddie Mac. Under the bi-partisan “Housing Finance Reform and Taxpayer Protection Act of 2013”, recently introduced by Senators Bob Corker (R-TN) and Mark Warner (D-VA), Fannie Mae and Freddie Mac would be replaced by a new agency, … Continue Reading
