A lawsuit accusing Moody’s and S&P of fraud and negligent misrepresentation in rating auction rate securities in the runup to the 2008 crisis was dismissed by a New York court last week.
Moody’s warned that a government shutdown could lead to a downgrade of its AAA rating for the U.S., Fannie and Freddie plan new social disclosures; DBRS proposes revisions to CLO rating criteria.
The final rule for private fund advisers addressed many concerns of CLO market watchers around compliance burdens. Separately, a federal appeals court held that syndicated term loans aren’t securities.
There were increases in CRE and refinance CLO issuance during the second quarter, but the market’s bread-and-butter sectors — BSL and MML — both saw declining production. (Includes two data charts.)
Attractive spreads are drawing investor interest to the CLO market, where strong BSL securitization drove surging issuance. (Includes two data charts.)
Despite a surge in middle-market CLO issuance in the fourth quarter, total production of structured credit deals drifted lower in late 2022. Blackstone was the most active sponsor, while JPMorgan led in CLO underwriting. (Includes two data charts.)
The proposed rule is meant to prohibit ABS issuers from engaging in “conflicted transactions” that could influence the deal structure in a way that puts their interests ahead of those of investors.
If the Second Circuit reverses a district court ruling and holds that a syndicated term loan is a security, the implications would be immense for banks, CLOs and other parties.
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