Commercial lending

The captive-finance lender for General Motors is providing lower expectations for the vehicles' future residual values, compared to its prior lease ABS deals, in recognition of the likely severe recessionary impact of the coronavirus outbreak.

The firm will offload parts of its business including its business development company, Garrison Capital Inc., and other credit vehicles.

“Since April, the decline in corporate credit has resulted in a significant number of downgrades among the assets underlying some CLOs,” a Moody’s press release stated on Wednesday.

Shut out from many coronavirus relief programs, private equity companies have found a back door at HHS, where they have borrowed at least $1.5 billion.

The changes being sought would benefit both small businesses and banks, which would avoid the cost of servicing many low-yielding loans.

The Federal Reserve set up a liquidity facility to help banks meet demand for emergency small-business loans through the Paycheck Protection Program, but it's gone largely unused.

The new regulation is intended as a workaround for banks affected by the 2015 decision that created legal uncertainty for loans sold across state lines.

Business development companies (BDCs) were trending ever healthier prior to the pandemic, but if the economy remains in the deep doldrums it may ultimately be their affiliated asset-management companies that investors should look to for assurance.

The Federal Reserve Bank of Boston published details on the terms for lenders and borrowers to participate in the facility intended to provide coronavirus relief funds to middle-market firms.

A New York judge last week dismissed a claim that a leveraged loan JPMorgan Chase & Co. and other Wall Street banks sold in 2014 could be considered a security and, as such, be subject to the same disclosure requirements as stock and bond offerings.