Corporate Loan Securitization and Standardization of Finance Covenants

Over the last few years, the corporate loan market has experienced significant growth. Arguably, the most significant development has been the securitization of syndicated loans through Collateralized Loan Obligations (CLOs). CLOs are special purpose entities that purchase high-yield corporate loans and use the principal and interest payments of these loans as collateral to issue new senior and junior notes (called CLO notes) that are bought by banks and non-bank institutional investors such as hedge funds and insurance firms. The CLO loans and notes are rated by at least two credit rating agencies to reduce information asymmetry between managers and investors. … Read more

On the Role of Companies’ External Securities Law Advisors – Facilitators or Gatekeepers?

In order to retain their access to large scale capital at low cost, there is no question that companies need to actively manage their compliance with the ever-increasing regulatory requirements in the United States pertaining to corporate disclosure. Managing this obligation isn’t easy and, inter alia, necessitates securities law expertise. In a recent paper, we explore one avenue that companies use to navigate the complexity of disclosure regulation – seeking advice from external securities law experts.

Pursuant to Section 408 of Sarbanes Oxley Act of 2002, the Security and Exchange Commission’s (SEC) Division of Corporation Finance (DCF) enforces … Read more