Regulators scrutinise fund loans

The NAIC’s Super Bowl Sunday memo seems to suggest regulations may not change greatly

Private credit managers need valuation process around market events - UK regulator
The FCA released a private markets review recommending firms identify and manage potential issues around valuations, especially those conducted as a result of asset-level or market events.

Institutional loans set records while ratings agency data diverges
It isn’t just the CLO market breaking records this year. Loan volumes are also continuing to set records, according to the latest Debtwire data for November.

The second Trump presidency is likely to turbocharge already frothy markets
The impact of Trump’s second term in the Oval Office will be wide-ranging for the US and the world. For credit markets, his return to power portends more intense competition between banks and private credit, and frothier deals.

Credit funds brace for increased scrutiny from regulators
The Securities and Exchange Commission’s Division of Examinations urged advisers to private funds, which include private credit managers, to prepare for increased scrutiny 

CLO managers scramble to update policies after SEC ruling
The announcement from the SEC that it had fined Sound Point has sent shock waves through a US CLO market that’s looking at a wave of policy changes

US insurance regulator steps back from radical change to CLO charges
Insurance companies are one of the most important investors in CLOs, so when the NAIC last year proposed changes to risk-based capital (RBC) charges the market was spooked

UK changes to securitisation expected to have limited impact on CLOs
As Creditflux went to press, lawyers across the City of London were coming to grips with the meat of the UK’s new securitisation regime, the so-called Edinburgh Reforms

We understand why the NAIC is open to a new framework
The NAIC is right to tread carefully as it looks to protect its members from ratings arbitrage

New AIFMD directive imposes leverage limits for European direct lending
The Council of the European Union has rolled out new regulations that should streamline the origination process for direct lenders at the cost of strict limits of leverage for funds

Securities regulators call for improvement in practices in CLO market
IOSCO, an international policy forum for securities regulators, has called for improvement in practices in both the leveraged loan and CLO markets.

In Kirschner fallout, lenders may be asked to rep that they aren’t investors

Our Xtract Research team explores an unexpected outcome from the recent Kirschner ruling  

Appeals court and SEC rule in favour of CLO market
The US CLO market breathed a sigh of relief in August as two major regulatory rulings went in its favour

JP Morgan wins Kirschner case as court rules loans are not securities
The Second Circuit Court of Appeals has ruled in favour of JP Morgan in the Kirschner case that term loan Bs are not securities

Proposed US bank regulations could create more demand for CLO triple A notes
Recent proposals on bank capital requirements in the US may increase demand for CLO triple A paper, according to new research by Barclays

Loan market breathes sigh of relief as SEC declines to comment on Kirschner case
The SEC decided not to intervene in an ongoing court case about whether US leveraged loans are securities last week in an important win for the loan market.

Proposed regulation changes could open up US CLO funds to UK investors
Proposed changes to the UK Securitisation framework may expand the investor base for US structured credit if passed.

Legacy CLO notices go out for Sofr switch
Legacy CLOs are poised to transition to Sofr in a smoother manner than their underlying assets, according to market sources, who say that almost every issuer has sent notices to their investors signalling that they plan to make the switch on 30 June. 

Loan market says goodbye to Libor in legacy contracts
In July, after 37 years of widespread use as the underlying base rate for contracts, the London Inter-Bank Offered Rate will finally be ditched by the majority of the leveraged loan market.

Should I worry about synthetic Libor?
The date on which the ICE Benchmark Administration (IBA) will cease publishing the remaining available tenors of Libor is fast approaching. But initially, publication of all tenors of Libor was supposed to cease on 31 December 2021. 

DLA Piper: new regulations expand "conflict of interest" definition that goes back 30 years [video]
At Creditflux's CLO Symposium in London in May, DLA Piper partners Richard Reilly and Konstantinos Vavelidis discussed the regulatory outlook for the CLO market on both sides of the Atlantic

FCA greenlights synthetic Libor
The UK’s Financial Conduct Authority has given the go-ahead for ‘synthetic Libor’ as it creates a bridge for Libor contracts that do not have any hard-wired language referencing Sofr. 

LSTA requests comment period extension on SEC's securitisation conflicts rule
Comments are due 27 March but an extension no sooner than 24 June has been requested

US CLOs may require audits under revisions to SEC custody rule
New sweeping revisions to the SEC’s Custody rule in mid-February could require US CLOs to be audited and officials tell Creditflux the rule poses very significant challenges which are problematic from a high level, not just in the loan space.