Read the latest articles and press releases about securitization and structured finance.

Industry News

Market Sees Rise in Leveraged Loan Transactions Tied to SOFR

The use of SOFR in structured product transactions continues to gain momentum as two U.S. leveraged loans have priced using regulators’ preferred replacement benchmark for LIBOR

Industry News

Department of Housing and Urban Development Announces ANPR on LIBOR Transition

On October 5, the Department of Housing and Urban Development (HUD) announced an Advanced Notice of Proposed Rulemaking (ANPR) for adjustable rate mortgages transitioning from LIBOR to alternate indices.

Industry News

Federal Reserve Board Vice Chair on LIBOR and ESG

On October 5, Federal Reserve Board Vice Chair Randal Quarles delivered the unambiguous message – LIBOR is ending. During his speech at the Structured Finance Association conference, SFVegas 2021, Quarles said he expects to see the market transition to SOFR accelerating in these “final 87 days” of 2021.

Industry News

CLO Sales See Spike Ahead of LIBOR Cessation

The Wall Street Journal (WSJ) reports a substantial spike in CLO sales following expectations set by the official sector that no new contracts should be indexed to LIBOR after 2021. With August usually a slow month for the market, CLO U.S. issuance reached $19.2 billion, a monthly record in data going back a decade, according to S&P Global Market Intelligence’s LCD.

Industry News

ARRC Releases FAQs on Best Practice Recommendations for Use of SOFR Term Rate

On August 27, the Alternative Reference Rate Committee (ARRC) released FAQs outlining the scope of use of SOFR Term Rate. These FAQs build on the ARRC’s formal recommendation of the SOFR term rate and key principles published in April 2021.

Industry News

Top U.S. Regulators Agree Nonfinancial Corporations Need LIBOR Alternatives

On August 23, top officials of the Treasury Department, Federal Reserve, Securities and Exchange Commission and Commodity Futures Trading Commission issued a letter to nonfinancial corporations addressing the ongoing LIBOR transition. The letter came after nonfinancial corporate trade groups had raised concerns around the lack of guidance with the transition, including challenges with finding lenders offering loan agreements based on SOFR.

SFA News

SFA Leads Development of the ARRC’s Supplemental Update to Recommended Fallback Language for LIBOR Securitizations

On August 18, the Alternative Reference Rates Committee (ARRC) released a supplemental update to its recommended contractual fallback language for USD LIBOR securitizations. SFA as a co-chair of the ARRC’s Securitization Working Group (SWG) led the development of the update which acknowledges the occurrence of a benchmark transition event in the ARRC Recommendations Regarding More Robust Fallback Language for New Issuances of LIBOR Securitizations.

Industry News

Federal Reserve Warns Judge to Not End LIBOR Too Quickly

The Federal Reserve told a federal judge to not terminate LIBOR as requested by plaintiffs in a lawsuit, reinforcing that the ruling would pose a risk to financial stability and undermine years of global planning for a transition to alternative benchmark rates. In the federal lawsuit filed in San Francisco, plaintiffs assert the LIBOR benchmark is the work of a “price-fixing cartel.”

Industry News

Shift to SOFR Gains Momentum

New findings show the use of SOFR within the swaps market rose to 20% of transactions from less than 4% in the first two trading days after the Commodity Futures Trading Commission's (CFTC) launched its "SOFR First" campaign for interbank markets on July 26.

Press Releases

Structured Finance Association Applauds Committee Passage of LIBOR Transition Legislation

The Structured Finance Association (SFA) today applauded the House Financial Services Committee adopting and favorably reporting the Adjustable Interest Rate (LIBOR) Act of 2021 (H.R. 4616) to the full House of Representatives by voice vote. The legislation will ease the transition away from the London Inter-Bank Offered Rate (LIBOR), which is the benchmark index currently used, for example, to determine the interest rate that consumers pay on some credit cards, home equity lines of credit, reverse mortgages, and private student loans.

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