Category Archives: Structured Finance

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Funny Times

What funny times in which we live; an observation perhaps highly dependent upon your notion of fun.  Maybe curious is the better description.  Daunting?  Frightening?  Opaque and unknowable?  All probably good descriptions.  True of politics.  True of business.  Sticking to business, it’s hard to get conviction around anything right now.  Nonetheless, we must.  Everyone needs … Continue Reading

Auto ABS: Uncertainty and Excitement Ahead

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

CMBS On The Perp Walk: We Are Being Set Up!

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

“I Was Just Following Orders”

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

Ratings Agencies in the Crosshairs

Back in the febrile, hyperventilated times that birthed the Dodd-Frank Wall Street Reform and Consumer Protection Act (blessedly known simply as Dodd-Frank), one of the issues that energized the activists’ intent on “fixing” what was wrong was the notion that the ratings agencies were complicit in the overpricing of financial assets.  In a “want for … Continue Reading

Proposed Tax Rules on LIBOR Replacements Answer Some (But Not All) Questions

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

Quick Note: What Will the ARRC Recommend for the Spread Adjustment?

The LIBOR transition process is an affair of headache-inducing complexity.  Amidst the thousands of gallons of ink spilled on the subject, we thought it might be useful, from time to time, to give you some important information in  bite-sized servings (don’t worry, we will continue to publish lengthy, irreverent commentaries on the subject that our … Continue Reading

It’s Time to Fix Securitization: Are We Dinosaurs Staring Into the Tar Pit?

In order to avoid burying the lead, let me tell you where I’m going here.  The CRE securitization business is in trouble.  We need to throw out what biologists call the punctuated equilibrium, where once a system initially stabilizes, it thereafter changes little and resists radical change.  Elsewise, our business is at very material risk … Continue Reading

Beany & CECL

Beany & Cecil was a cartoon.  The Current Expected Credit Loss accounting rules, better known as CECL, which the FASB is insisting will go into effect at the beginning of next year for publicly traded banks and lenders and a year later for all other GAAP reporting entities is not.  Now, heaven forfend that I … Continue Reading

Pending Sub-Prime Lawsuit Questions Securitization’s “Debt” Classification for ERISA Purposes

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

SFIG Vegas 2019

As we return to our desks after last week’s whirlwind in Las Vegas for the Structured Finance Industry Group (SFIG) Conference, we find ourselves reflecting on how this conference was at once business as usual while also showing evidence of an evolving industry looking to the future. Approximately 8,050 attendees, including a sizable Dechert team, … Continue Reading

The Next Recession: Something…Perhaps Not Really Wicked… But Certainly Annoying…This Way Comes

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

The Boundaries of Risk Retention Now That the D.C. Circuit Has Spoken

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

New Accounting Rules Regarding AUPs Taking Effect May 1, 2017:  More Fun for a Battered Industry

The Auditing Standards Board (the “ASB”) of the American Institute of Certified Public Accountants recently released new standards as part of the “Attestation Clarity Project” with the goal of redrafting all its standards “in clarity format” (what format were they in before?  And, while we’re at it, can we try to use English here?  Clarity format?).  This Project will require compliance by … Continue Reading
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