DOJ probing for collusion in CLOs during Libor transition
Antitrust prosecutors in New York seek to determine whether investors with an equity stake in the $1.3 trillion CLO market illegally coordinated as the underlying buyout debt was repriced.
LIBOR
Libor zombies pit hedge funds against banks in high-stakes feud
The key to the trade is that the instruments, worth about $20 billion in all, are pegged to the now-defunct London interbank offered rate, or Libor.
BofA: Leveraged-loan lenders face rising defaults, Libor transition
CLO spreads should tighten toward year-end, easing arbitrage challenges. Meanwhile investors will be challenged to calibrate the recovery rate, says Pratik Gupta.
By
John Hintze
Tester says Libor fix law will pass this week
The Montana Democrat also urged his Senate colleagues to pass the SAFE Banking Act, while Sen. Jerry Moran of Kansas claimed that the Republican boycott of Sarah Bloom Raskin had nothing to do with her views on climate change.
As Libor goes away, U.S. replacement makes a big trader uneasy
The problem, according to Wilson, is that SOFR will do a poor job hedging risks in turbulent times.
Libor, pot top bankers’ fall wish list in Congress
Infrastructure will command most of lawmakers’ attention, but expect banks to keep pushing for bills that would ease the transition away from a key benchmark rate and help them serve legal cannabis businesses.
Libor’s final days begin with push to shake up swaps market
U.S. regulators are wagering a major shakeup of the multitrillion-dollar interest-rate swaps market is just what’s needed to wean Wall Street off the London interbank offered rate for good.
Opinion Say goodbye to Libor, or risk the ire of your regulator
Federal Reserve Vice Chair Randal Quarles has made it clear that banks failing to make the transition away from the benchmark rate could face supervisory consequences.
Steve Bartlett
Treliant
MBA creates servicer notifications for Libor’s discontinuation
The modifiable templates are a follow-up to a similar notification the organization created in 2019 for lender use.
Weekly Wrap: KBRA places aviation ABS notes under downgrade watch
Deals, trends and research in structured finance and asset-backed securities for the week of April 9-16
By
Glen Fest
Weekly Wrap: S&P lowers default-rate forecast
Deals, trends and research in structured finance and asset-backed securities for the week of March 26-April 1
By
Glen Fest
Killing off Libor gets real for banks on key milestone date
Starting Thursday, firms should stop issuing new loans, bonds and securitizations tied to the discredited benchmark, according to the Bank of England.
ARRC touts use of 30-day average SOFR for new-issue ABS, MBS
A white paper released Monday by the Alternative Reference Rates Committee outlined how issuers could (and perhaps should) model new floating-rate transactions using a compounded version of the interbank overnight rate instead of Libor.
By
Glen Fest
Calls intensify for Congress to intervene on Libor
The heads of the Federal Reserve and Treasury are urging passage of legislation that would replace Libor with the Secured Overnight Financing Rate in certain contracts. That would spare banks litigation over trillions of dollars of contracts when Libor expires in 2023.
Libor’s U.K. overhaul could get a 10-year fix to avert chaos
Concerned that some troublesome financial contracts won’t be able to switch to replacement benchmarks, the Financial Conduct Authority plans to publish a “synthetic” London interbank offered rate.
New York passes legislation imposing Libor-benchmark replacement
The act, yet to be signed by Gov. Cuomo, aims to resolve the difficult problem of how to fairly compensate floating-rate investors in instruments for which the London interbank offered rate is no longer published.
By
Glen Fest
Libor’s end leaves nearly $2 trillion of debt facing legal limbo
Almost $2 trillion of debt pegged to dollar Libor, much of which can’t easily be shifted to an alternative benchmark, won’t mature until after the discredited rate expires in mid-2023, according to the Federal Reserve-backed group guiding the transition.
Fed’s Quarles aims to clear up confusion about Libor deadline
Legacy contracts using the London interbank offered rate — which is set to be phased out at the end of this year — were granted a reprieve to mid-2023. However, there is no wiggle room on when the rate will expire for new deals, said Federal Reserve Vice Chairman Randal Quarles.
SOFR benchmark making inroads with private-label MBS
A PIMCO-sponsored HELOC securitzation, as well as a mortgage-insurance linked transaction, are the latest examples of issuers getting a head start on switching to an expected replacement benchmark for Libor.
By
Glen Fest
Fed warns banks they face consequences for slow Libor shifts
“Supervised firms that are not making adequate progress in transitioning away from Libor could create safety and soundness risks for themselves and for the financial system,” a Fed division director said.
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