-
2 weeks ago | 
asreport.americanbanker.com | John Hintze
Tariff-induced volatility may give lenders more leverage when it comes to incorporating so-called omni-blockers that aim to provide blanket, proactive protection against aggressive liability management exercises (LMEs), which diminish lender seniority in the debt stack.
-
2 weeks ago | 
garp.org | John Hintze
The leveraged-loan restructurings known as liability management exercises (LMEs) climbed to record levels as troubled borrowers sought to avoid bankruptcy. But the contentious out-of-court transactions have been somewhat tempered by legal rulings as senior lenders continue to defend their interests. The restructurings, enabled by weak lender protections in loan documentation, generally seek to extend loan maturities, lower interest rates, or otherwise provide relief to debtors.
-
3 weeks ago | 
asreport.americanbanker.com | John Hintze
Liability management exercises'(LMEs) 60% increase in April over the month before, as reported by JPMorgan (JPM), is less daunting than it first appears. LMEs by financially distressed companies increased to $3.5 billion in April compared to $2.2 billion in March and $1.6 billion in January, according to Reuters, which first reported the trend, citing JPMorgan's "Default Monitor".
-
4 weeks ago | 
garp.org | John Hintze
Following a meeting in March, the Basel Committee on Banking Supervision cited its ongoing work in such areas as “lessons learned” from the 2023 banking turmoil, technology risk and resilience, and “banks’ interconnections with non-bank financial intermediation (NBFI).” As part of the latter assessment, the committee said it intended “to conduct over the coming year a deep-dive investigation on synthetic risk transfers (SRTs),” which banks use to transfer their credit risk while keeping loans...
-
1 month ago | 
garp.org | John Hintze
Market participants waiting for years for comprehensive hedge accounting guidance may soon get their wish. The Financial Accounting Standards Board included “Risk Management and Hedge Accounting” in its January Agenda Consultation document with an invitation to comment. Hedge accounting in financial statements describes the use of derivatives to hedge interest-rate and foreign-exchange risk.
-
1 month ago | 
asreport.americanbanker.com | John Hintze
The Trump Administration's wide-ranging–and ever-changing–tariff strategies have already impacted the securitization market adversely. If kept in place, warn the credit-rating agencies, they will negatively impact virtually all sectors, with any benefits likely to be temporary. "The disruption prompted several transactions that KBRA was in the process of rating—totaling approximately $17.5 billion—to be placed on hold," the rating agency said in an April 11 report.
-
1 month ago | 
rmmagazine.com | John Hintze
In recent years, the intensity of storms and the length of droughts that exacerbate wildfires have coincided with increasingly variable weather patterns generally attributed to long-term climate change. For example, Hurricane Helene originated last September in the Gulf of Mexico and eventually wreaked havoc as far north as Appalachia, and a few months later, wildfires ravaged neighborhoods deep inside Los Angeles County during the region’s typically wetter months.
-
2 months ago | 
asreport.americanbanker.com | John Hintze
While liability management exercises (LMEs) in the U.S. were less prone to creditor-on-creditor violence last year, aggressive LMEs have persisted and recently even skirted legal roadblocks, while Europe's first aggressive LMEs are now being tested in court.
-
2 months ago | 
garp.org | John Hintze
Although U.S. commercial real estate is not out of the doldrums, the outlook has turned at least selectively positive. While some geographical areas remain cyclically challenged, and the office segment is facing a long period of readjustment, the data center and warehouse sectors are particularly strong, as are specialty properties such as medical offices, according to Cris deRitis, deputy chief economist at Moody’s Analytics.
-
2 months ago | 
asreport.americanbanker.com | John Hintze
Nuveen launched in December a collateralized loan obligation (CLO) ETF focused on single A-rated CLO bonds (NCLO), and in January it converted the Nuveen CLO Opportunities Fund to an interval fund (NCLOX), providing a broader range of investors with access to CLO equity and mezzanine tranches. By focusing on less fashionable parts of the CLO stack—most CLO ETFs that target AAA and BBB bonds—Nuveen aims to generate higher returns without significantly increasing risk.
