In an effort to improve market efficiency and to speed settlement, the Loan Syndications and Trading Association (the “LSTA”) has amended its trading documents in order to address concerns that market participants are increasingly failing to make timely payment of the “Purchase Price” with respect to their bank loan trade settlements. Although typically only one or two days late, some delays have been substantially longer, and such failures can understandably prove to be quite costly to loan sellers and disruptive to the market as a whole. The amendments introduce language into the LSTA Standard Terms and Conditions for its suite of trade confirmations (the “Standard Terms”) that requires tardy loan buyers to pay a “Late Payment Fee.” *
Continue Reading LSTA Introduces Late Payment Fees for Loan Trade Transactions
LSTA Proposes Introduction of Late Payment Fees in Loan Trade Transactions
In an effort to improve market efficiency and to speed settlement, the Loan Syndications and Trading Association (the “LSTA”) is proposing amendments to its trading documents in order to address concerns that market participants are increasingly failing to make timely payment of the “Purchase Price” with respect to their bank loan trade settlements. Although typically only one or two days late, such failures, on a large scale, can prove to be quite costly to loan sellers and disruptive to the market as a whole. The proposal would introduce language into the LSTA Standard Terms and Conditions for its suite of trade confirmations (the “Standard Terms”) that would require tardy loan buyers to pay a “Late Payment Fee.”
Continue Reading LSTA Proposes Introduction of Late Payment Fees in Loan Trade TransactionsThe Problem of “Debtor-Creditor” Language when Selling Loans by Participation
Participation agreements, in the form promulgated by The Loan Syndications and Trading Association, Inc. (LSTA), are widely regarded as dependable vehicles for conveying loan ownership interests from a lender to a participant as “true sales” in the United States. But what if the underlying credit agreement describes the participation as a financing relationship between a