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
Recently, Dechert Partner Sarah Milam partook in an auto ABS panel discussion at ABS East in Miami, Florida. Sarah and four distinguished panelists discussed the state of the ABS auto loan market, issuance, yields, collateral performance, ESG trends, and deal structures. Sarah sat down with Associate Griffin Hamilton to recap the conference.… Continue Reading
There’s a lot of reasons to structure a large loan destined for securitization as a mortgage in part and a mezzanine loan in part. Sometimes it’s simply that the borrower is needy while the capital markets are charry. In that case, the lender whacks up the credit into a mortgage loan for SASB execution and … Continue Reading
Folks, last week I made the point that it’s extremely important to confront negative narratives about our industry before they take hold, creep into the interstices between things that are true and then somehow ossified into received wisdom. So, taking on board my own advice, which shockingly I find compelling, I want to sound the … Continue Reading
After much anticipation and expectation, on June 25, 2020, the Federal Reserve Board, CFTC, FDIC, OCC, and SEC (the “agencies”) finalized an amendment to Section 13 of the Bank Holding Company Act, commonly known as the Volcker Rule, which among other things prohibits banking entities from sponsoring or acquiring ownership interests in “covered funds.” Covered … Continue Reading
Crunched Credit’s own Rick Jones spoke with the TreppWire team for their latest podcast. Covering everything from the future of CMBS to the Great Recession, the conversation was wide reaching. Be sure to tune in for more on Rick’s interview with Sam Zell, how we’re headed for a “square root” recovery and why this “light … Continue Reading
The closing deadline is quickly approaching! Which of the following two processes would you choose? Would you: (a) create a pdf of signature pages and request that parties provide a digital signature and return via email, or (b) print out multiple sets of paper copies of each signature page for each transaction document in triplicate, … Continue Reading
One of the pleasures of life is re-encountering old friends, catching up on what’s happened while your lives have gone their separate ways, reminiscing about the good old days and reconnecting. It comes back so fast, it’s like you never were apart. Me and the Liquidating Trust had just such an experience the other day.… Continue Reading
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 … 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
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
We have been writing off and on about the restoration to good graces of the commercial real estate CLO since the early days of this current recovery, and it’s important to keep the conversation going. Hey, if Pete Rose can get into the Hall of Fame (and as MLB is embracing gambling, that cannot but … Continue Reading
With full and complete credit to the Bard (Macbeth), and to Mr. Ray Bradbury who repurposed this line as the title for his 1962 dark fantasy (of which I was and still am a huge fan), there is just not a better title for this note. Trust me. A few weeks ago, I inked a … Continue Reading
In February, the D.C. Court of Appeals ruled in The Loan Syndications and Trading Association v. Securities and Exchange Commission and Board of Governors of the Federal Reserve System, No. 17-5004 (D.C. Cir. Feb. 9, 2018) (the “LSTA decision”) that a manager of an open market CLO is not required to retain risk under the … Continue Reading
In 2013, the Obama administration issued the Cole Memorandum, which called a truce between federal prosecutors and marijuana businesses operating legitimately under state law. After regime change in Washington, however, it may come as no surprise that Jeff Sessions—the Attorney General who once opined that “good people don’t smoke marijuana”—rescinded the Obama-era guidance. The only … Continue Reading
We published the below commentary, In Defense of Securitization, last week and we are republishing it today as, let’s face it, we’re all getting very French, and many of us took most of last week off. Enjoy, if that’s the right word. Returning to the theme of my most recent commentary entitled God Hates Securitization, … Continue Reading
Returning to the theme of my most recent commentary entitled God Hates Securitization, I want to elaborate on the point I made there (yes, if you stuck with me all the way through to the end, there was a point): We need to fight the narrative that banking, finance and securitization are evil. I am … Continue Reading
The Wall Street Journal recently reported that the Papacy has denounced securitization characterizing it (in such an intellectually balanced way) as tainted by “predatory and speculative tendencies.” Good Lord! Now, I’m not perfect — I can’t remember the last time I participated in a black mass, inverted a crucifix or committed any of the more striking … Continue Reading
We at Dechert had our annual business meeting last week in Miami (tough duty). Nestled in the general atmospherics of bon ami and collegiality were sessions on collaboration and connectivity amongst the lawyers in our firm. Apparently the data suggested that law firms make more money when the partners of the firm work together. Flash. … Continue Reading
Morningstar has published a proposed method for rating single-asset/single-borrower (SASB) transactions. The new approach is slated to replace the “U.S. CMBS Subordination Model” with respect to SASBs and other forms of CMBS securities with similar credit and diversity profiles, including large-loan transactions and rake certificates. Morningstar has issued a request for comments on the proposal. … 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
Around this time of year, we slip on the prognostication goggles and take a look forward into the next year. While there is ample evidence that prognostication is a dodgy exercise, I always tell my folks that the fact that it’s hard to do and extraordinarily unreliable is not an excuse not to have a … Continue Reading
