So, once again, time for Dechert’s acclaimed (at least by us) Annual Golden Turkey Awards.  It is rather a difficult time for comedy; we are in the throes of a completely unfunny pandemic.  Sitting down to finalize this year’s list gave me some sympathy for our late-night talk show hosts who are very publicly pining over the end of the Trump administration and trying to find humor in the anticipated Biden administration, where the watchword is “dull is cool.”  But perhaps looking for inanity and making gentle fun of it might even be more important in tough times than good.  So, with that in mind, we went digging for gems in 2020.  Nothing seems quite so risible as in past years, but here’s the best of a bad lot:Continue Reading 2020 Golden Turkey Awards

Timing is everything.  I published a piece two weeks ago on LIBOR transition to SOFR and suggested that folks get on with it and embrace this flawed but seemingly inevitable new SOFR index.  Writing that piece, I thought of as rather an exercise in self-care, I just had to get beyond my annoyance with SOFR and stop worrying about SOFR and embrace it with all its flaws and join the SOFR chorus.
Continue Reading Inexorably SOFR…But Hang On!

Since nothing is happening in the news right now, we thought we would put out a second post on LIBOR this week.  As you may know, Dechert has a LIBOR podcast which you can find on our YouTube page.  In the latest episode, David Bowman, Senior Associate Director from the Board of Governors of…

I wrote back in the early days of 2020, or as we call it now, the “Time Before,” that we thought it made sense for key market participants to consider an early move to SOFR pricing, not just as the backstop but as the interest rate of the loans.  Frankly, we were thinking about the SASB market, and we thought that would be indeed well received by the investor community.
Continue Reading It’s Time to Initiate a SOFR Loan…Or Maybe Not

I am trying to figure out how much I care, as a businessman (as opposed to an actual living, breathing human being), about the chaos swirling around us.  Every day’s news seems more the stuff of a dramatic conceit of someone’s next thriller than reality.  Throw in a car chase and some sex, and we’ve got a movie.  (The North Carolina sexting scandal doesn’t really get us there for this purpose.)
Continue Reading Inflection Point? How Much Change Are We Really Facing?

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 alarm about a recent Wall Street Journal story concerning the misstatement of net operating income in our industry (I only wish I could qualify as an influencer here.  I read about two teens with millions of followers this weekend; they talk about stuff like..their hair.  Is there anyone out there that wants to know about my hair?).
Continue Reading CMBS On The Perp Walk: We Are Being Set Up!

In the fourth installment of our new LIBORcast program, Matthew Hays and Jonathan Gaynor discussed interest rate caps, derivatives and value transfer with Chatham Financial’s Rob Mangrelli and Matt Hoffman.  Tune in to hear about the cost of a SOFR interest rate cap, adoption of the ISDA protocol and rate fragmentation in the post-LIBOR market.…

We have virtually no bandwidth to deal with anything other than the pandemic, do we?  The marches of every conversation begin with “you’re okay, I trust” and end with “take care” and now we really mean that.  It’s exhausting, isn’t it?  It’s hard to even remember the “time before.”
Continue Reading There’s a New Black Swan in Town and It’s After Us!

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 funds are entities that would be investment companies but for exemptions provided under Sections 3(c)(1) or 3(c)(7) of the Investment Company Act, and generally include private equity funds and hedge funds.  The final rule, which goes into effect on October 1, mostly follows what the agencies had signaled to everyone back in the mask and quarantine-free days of January when it released proposed changes that are largely adopted in the final rule.
Continue Reading Volcker Rule Amendment: Trending Towards Flexibility

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…