On February 22, 2018, the Securities and Exchange Commission (“SEC“) announced that it is adopting an interim final rule that provides a six-month extension for compliance with certain requirements of Rule 22e-4 regarding a fund’s liquidity risk management program, including the portfolio classification, highly liquid investment minimum, and board approval requirements, as well as related reporting requirements under Part D of Form N-LIQUID and liquidity disclosures on Form N-PORT under the Investment Company Act of 1940. The interim final rule extends the compliance deadline for small entities from June 1, 2019 to December 1, 2019 and for larger entities from December 1, 2018, to June 1, 2019. The SEC also issued guidance to assist (i) funds that will not classify their full portfolio prior to the revised compliance date and (ii) In-Kind ETFs in identifying illiquid investments for purposes of complying with the 15% illiquid investment limit under Rule 22e-4. Release.
Alex Radisich, a Senior Associate in Orrick’s Los Angeles office, is a member of the firm’s Structured Finance and Banking and Finance Groups.
Alex represents a variety of market participants, including issuers, sponsors, underwriters, servicers, loan sellers and purchasers in connection with securitizations, asset-backed financings and asset acquisitions and sales. Alex has experience working with a wide range of asset classes, including agency and non-agency forward and reverse residential mortgage loans, fix-and-flip loans, servicing rights and advances, consumer loans, student loans and non-performing loans.
Alex also has experience advising clients on securitization and servicing issues in the bankruptcy context. Alex represented Ditech Holding Corporation, one of the nation’s largest mortgage servicers, as special securitization counsel in connection with its bankruptcy proceedings. In this role, Alex negotiated the terms for the sale of Ditech’s portfolio of agency and non-agency forward mortgage servicing rights and mortgage loans and advised on various securitization and servicing issues that arose with securitization trustees and federal agencies.
During law school, Alex served as a judicial extern to the Honorable Judge Harry Pregerson of the United States Court of Appeals for the Ninth Circuit, and as a law clerk on the Senate Judiciary Committee for Senator Dianne Feinstein.
Posts by: Alexander Radisich
OCC Amends Rules Governing Annual Stress Testing Under Dodd-Frank
On February 23, 2018, the Office of the Comptroller of the Currency (“OCC“) announced a final rule that revised the OCC’s annual stress test regulation. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act“), the Board of Governors of the Federal Reserve System (the “Board“) is required to conduct annual stress tests of holding companies with $50 billion or more in assets. The OCC’s final rule (i) extends the range of possible “as-of” dates used in the global market shock component of the annual stress test to conform to changes made by the Board and (ii) provides additional time for bank holding companies that cross the $50-billion-in-assets threshold in the fourth quarter of a calendar year to prepare for the stress testing requirements. Under the final rule, a bank holding company that crosses the $50 billion threshold in the fourth quarter of a calendar year will not be subject to the stress testing requirements until the third year after it crosses such threshold. Release.
Rating Agency Developments
CFTC Approves Amendments to Rules on Intermediary Registration and Review of Adverse Actions
On January 9, 2018, the U.S. Commodity Futures Trading Commission (the “CFTC“) approved final rules that update Parts 3 and 9 to integrate existing advisory guidance, incorporate swap execution facilities (“SEFs“) and update provisions currently applicable to designated contract markets (“DCMs“). Part 3 governs registration of intermediaries and Part 9 relates to CFTC review of exchange disciplinary, access denial, or other adverse actions. Press Release. Rules.
Rating Agency Developments
On December 27, 2017 DBRS published an updated rating methodology for Operational Risk Assessment for U.S. ABS Originators. Release.
On December 29, 2017 Moody’s published a performance review for Global Structured Finance Collateral. Release.
On January 3, 2018 DBRS published an updated rating methodology for Structured Finance Flow-Through Ratings. Release.
Rating Agency Developments
On October 25, 2017, Moody’s published an update to its rating methodology for US Stand-Alone Housing Bond Programs Secured by Credit Enhanced Mortgages. Release.
On October 25, 2017, KBRA published its rating methodology for the U.S. Not-for-Profit Healthcare sector. Report.
On October 20, 2017, DBRS published an update to its rating methodology for Companies in the Gaming Industry. Release.
On October 20, 2017, DBRS published an update to its rating methodology for Companies in the Canadian Grain Handling Industry. Release.
On October 20, 2017, DBRS published an update to its rating methodology for Companies in the Automotive Manufacturing and Supplier Industries. Release.
On October 19, 2017, Moody’s published an update to its rating methodology for US Municipal Utility Revenue Debt. Release.
On October 19, 2017, Moody’s published an update to its rating methodology for Publicly Managed Airports and Related Issuers. Release.
CFPB Issues Final Rule Temporarily Raising Reporting Threshold for Home Equity Loans Under Home Mortgage Act Rules
On August 24, 2017, the Consumer Financial Protection Bureau (the “CFPB“) issued a new rule that amends the 2015 updates to the Home Mortgage Act (“HMDA“) rules. Under the HMDA rules that are scheduled to take effect in January 2018, financial institutions would have been required to report home‑equity lines of credit if they made 100 such loans in each of the last two years. The new final rule issued by the CFPB increases the threshold from 100 loans to 500 loans through 2018 and 2019 while the CFPB considers whether to make a permanent adjustment. Read more here.
Rating Agency Developments
On August 31, 2017, S&P published its methodology for rating U.S. Credit Card Securitizations. Report.
On August 31, 2017, S&P published a Table of Contents to its Structured Finance Criteria. Report.
On August 31, 2017, Moody’s published its approach to rating SME Balance Sheet Securitizations. Report.
On August 31, 2017, Moody’s published a proposed revised framework to its approach to Mapping Ratings and Scores Provided by Third-Party Entities. Report.
On August 31, 2017, Moody’s published its approach to rating Corporate Synthetic Collateralized Loan Obligations. Report.
On August 31, 2017, Moody’s published its global approach to rating Collateralized Loan Obligations. Report.
On August 29, 2017, Moody’s published its global approach to rating Municipal and Sub-Sovereign CDOs. Report.
On August 24, 2017, DBRS published an update to its rating methodology for Companies in the Mining Industry. Report.
On August 24, 2017, DBRS published an update to its rating methodology for Container Terminal Operators. Report.
On August 24, 2017, Fitch published an update to its rating criteria for Global Rental Fleet ABS. Release.
Rating Agency Developments
On July 7, 2017, Kroll published its Research Recap for Q2 2017. Here are several articles of interest:
- ABS: KBRA Comments on Alitalia Extraordinary Administration Request
- AVIATION: 2017 Update Aircraft leasing Industry, How Private Placement Financings Contribute to Funding of Aircraft, KBRA Comments on Air Lease Corporation’s Exposure to Alitalia, KBRA Comments on Nordic Aviation Capital DAC’s Exposure to Alitalia, KBRA Comments on the Impact of Alitalia Extraordinary Administration Request on Aircraft Lessors
- CMBS: KBRA May Trend Watch Newsletter, NYU International Hospitality Industry Investment Conference Briefing, Oil Price Increases Won’t Plug CMBS Losses
- CORPORATES: Rating in a Vacuum or Rating in a Real World?
- FINANCIAL GUARANTY: Rating Risk and the Financial Guarantors: Deja Vu All Over Again
- FINANCIAL INSTITUTIONS: The Case for Community Banks, First Quarter 2017 Long-Term Bank Ratings Compendium, Trends for Business Development Companies 2017
- INSURANCE: Reinsurance Pricing and Capacity Are Rays of Sunshine for Florida Insurance Market
- MACRO-MARKET: China’s Imperial Ambitions, Tidal Waves in the Gulf
- PUBLIC FINANCE: In Bankruptcy Municipal Bondholders are Behind the Eight Ball, KBRA’s View on the State of the Solar Market: Conference Call Recap, Puerto Rico: Is It Doing Enough to Regain Capital Market Access?, Puerto Rico’s Economic Prospects Deepen its Quagmire
- RMBS: Freddie Mac ‘HVE’ LTV May Be Leading Indicator in STACR
- SOVEREIGNS: KBRA Comments on French Election
On June 29, 2017, DBRS published an update to its rating methodology for U.S. equipment lease and loan securitizations. Report.
On June 29, 2017, Fitch published an update to its rating criteria for insurance-linked securities. Release.
On June 28, 2017, Fitch published a report entitled U.S. State Housing Finance Agencies: Single-Family Mortgage Program Rating Criteria. Report.
On June 28, 2017, Fitch published a report entitled U.S. RMBS Surveillance and Re-REMIC Rating Criteria. Report.
On June 23, 2017, Moody’s published a report entitled Regulated Electric and Gas Utilities. Report.
On June 23, 2017, S&P issued a report entitled RMBS: Methodology And Assumptions: Assessing Pools Of Residential Loans In Austria, Denmark, Germany, And Sweden. Report.
On June 22, 2017, S&P issued a report entitled ABS: Global Methodology And Assumptions For Corporate Securitizations. Report.
On June 22, 2017, Fitch published a report entitled U.S. RMBS Rating Criteria. Report.
On June 22, 2017, Fitch published a report entitled EMEA CMBS and CRE Loan Rating Criteria. Report.
SEC to Allow Issuers to File Draft Initial Registration Statements on a Nonpublic Basis
On June 29, 2017, the Securities and Exchange Commission (“SEC“) announced that it would begin to allow issuers to file draft initial registration statements under the Securities Act of 1933 (the “Securities Act“) on a nonpublic basis. Any company, foreign or domestic, will be allowed to submit registration statements for nonpublic review, similar to the benefit granted to emerging growth companies under the Jumpstart Our Business Startups Act (JOBS) as long as it confirms in a cover letter that it will publicly file its registration statement at least 15 days prior to any road show or, in the absence thereof, at least 15 days prior to the requested effective date of its registration statement. The SEC also announced that it would begin to accept draft registration statements submitted prior to the end of the 12th month following the effective date of an issuer’s initial Securities Act registration statement, or its registration statement under Section 12(b) of the Securities and Exchange Act of 1934, for nonpublic review so long as the issuer confirms in a cover letter that it will publicly file its registration statement and nonpublic draft submission on EDGAR at least 48 hours prior to any requested effective time and date. Report. Press Release.