The $2.5 trillion syndicated loan market has been on edge for nearly two years thanks to an appellate case that could expose some of these private deals to new scrutiny under state and federal securities regulations. Law firm alerts have gone so far as to call the appeal an “existential threat” to the entire syndicated loan market.
The U.S. Securities and Exchange Commission might have quelled the market’s concerns this week with a single amicus brief. Indeed, the 2nd U.S. Circuit Court of Appeals asked the SEC in March to submit a brief expressing its views on the crucial question of whether the syndicated loans at issue in its case are securities specifically because the appeals court wanted to hear from the SEC before reaching a decision with huge policy implications.
The SEC chose to leave the market dangling.
Source: SEC punts on whether syndicated loans are securities, in closely watched appeal | Reuters
