The handbook of loan syndications and trading

Contents......Page 6
List of Contributors......Page 12
Preface......Page 16
Acknowledgments......Page 20
Chapter 1 An Overview of the Loan Market......Page 22
 An Introduction to the Loan Asset Class......Page 24
 Evolution of the Primary and Secondary Leveraged Loan Markets......Page 42
 Introduction to the Syndicated Loan Market......Page 60
 Players in the Market......Page 68
 Interplay with Other Capital Markets......Page 73
 The LSTA and Its Role in the Promotion of the Corporate Loan Asset Class......Page 82
 The LSTA—A Regulatory and Documentation Review......Page 96
Chapter 2 Effects of the Legal Characterization of Loans under the Securities Laws......Page 106
Chapter 3 Loan Structures......Page 122
 Basic Loan Structures......Page 124
 Second Lien Loans......Page 129
 Project Finance......Page 158
Chapter 4 The Primary Market......Page 176
 An Introduction to the Primary Market......Page 178
 The Architecture of Information Distribution in the Loan Market......Page 207
 The Implications of the Use of “Syndicate Information” in the Loan Market......Page 217
Chapter 5 Understanding the Credit Agreement......Page 230
 Part 1. Making the Loan: Commitments, Loans, and Letters of Credit......Page 232
 Part 2. Making Money off the Loan: Loan Pricing and Fees......Page 244
 Part 3. Making the Borrower Repay the Loan: Amortization and Maturity......Page 269
 Part 4. Conditioning the Loan: Conditions Precedent and Representations......Page 283
 Part 5. Monitoring the Loan: Financial, Affirmative, and Negative Covenants......Page 312
 Part 6. Securing and Guaranteeing the Loan: Collateral Packages......Page 348
 Part 7. Enforcing the Loan: Events of Default and Remedies......Page 357
 Part 8. Keeping Peace Among the Lenders: Interlender, Voting, and Agency Issues......Page 375
 Part 9. Selling the Loan: The Assignments Clause......Page 387
 Part 10. Understanding the Boilerplate: All the Stuff at the End That No One Ever Reads......Page 394
 Part 11. The Borrower Can Have Rights, Too......Page 407
Chapter 6 The Secondary Loan Market......Page 414
 An Introduction to the U.S. Secondary Loan Market......Page 416
 How to Trade Loans and the Strategies to Use......Page 424
 The Secondary Loan Market: Settling Loan Transactions......Page 441
Chapter 7 Secondary Market Pricing......Page 478
 Loan Valuation: The Origins of Secondary Market Pricing......Page 480
 The LSTA/LPC Mark-to-Market Process: Then and Now......Page 485
 The LSTA Trade Data Study: Measuring the Accuracy of Secondary Market Prices......Page 491
 Introduction to Model Pricing......Page 500
 Historical Secondary Market Price Performance, Distributions, and Volatility......Page 505
 Price Volatility and the Daily Value at Risk......Page 514
Chapter 8 Analytics and Performance......Page 528
 Analytics and Performance Overview......Page 530
 Measuring Loan Returns......Page 531
 Relative Value Analysis......Page 534
 Introduction: Rating Agencies in the Loan Market......Page 542
 Standard & Poor’s Loan and Recovery Ratings......Page 547
 Loan Loss Given Default: Trends to Consider......Page 554
 S&P/LSTA Leveraged Loan Index: Overview......Page 560
 Description and Inclusion Rules of the Credit Suisse Leveraged Loan Index......Page 562
 Credit Suisse Institutional Leveraged Loan Index......Page 569
 Leveraged Senior Loan Performance Attribution......Page 590
Chapter 9 Distressed Loan Investing......Page 602
 Introduction to Distressed Loan Investing......Page 604
 Securities Law Concerns Related to a Borrower’s Bankruptcy......Page 615
 Distressed Debt Investing—Risk Considerations......Page 623
 Distressed to Recovery: A Look at the Restructuring Process......Page 646
Chapter 10 Vehicles and Products Derived from the Asset Class......Page 664
 Introduction......Page 666
 Collateralized Loan Obligations: A Primer......Page 667
 Using Loan-Only CDS in the Leveraged Finance Markets: Implications in an Increasing Volatility Environment......Page 691
 Bank Loan Total Return Swap Primer......Page 701
Chapter 11 CDOs: A Primer......Page 730
Chapter 12 Loan Portfolio Management......Page 806
 Introduction......Page 808
 Loan Investment Strategies: An Overview......Page 814
 A Retail Loan Fund Manager’s Perspective......Page 820
 Portfolio Management by Nonbank Loan Investors......Page 824
 Distressed Loan Portfolios......Page 838
Chapter 13 Legal, Regulatory, and Accounting Issues......Page 844
 Introduction to Accounting Standards Applicable to Loans: A Bank’s Perspective......Page 846
 FAS 140 as Applied to Assignments and Participations......Page 855
 The Loan Market and Basel 2 Regulatory Capital Requirements......Page 863
Chapter 14 The Globalization of the Loan Market......Page 880
 Global Loan Market Review......Page 882
 The European Syndicated Loan Market......Page 909
 The Syndicated Loan Market in the Asia-Pacific Region......Page 919
 With Limited Options in the Domestic Loan Market, Japanese Investors Look to the United States for Investment Opportunities......Page 924
 Toward a More Integrated World: The Future of the Global Distressed Loan Market......Page 938
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