Washington reaches the suspicion of collusion in the market for guaranteed loan obligations

The US Department of Justice is conducting a criminal investigation into a possible violation of the anti -monopoly law, to find out whether some investors have merged into the guaranteed loan obligations (CLOM) to support their financial centers, in light of the market’s reference index, whose reputation was influenced by the case. These persons, who asked not to reveal their identity because of the study of investigating, said that federalists who specialized in Monopoly matters in New York sent legal calls to financial institutions, in the context of their efforts to determine if there are investors who have shares in the 1.3 trillion loan commitments, which have their actions illegally coordinated during the recycling associated with these financial tools. According to the people, the investigation began about one and a half years ago. A spokesman for the Ministry of Justice refused to comment. The fear of illegal coordination in the last months of 2022 and early 2023, before the permanent cancellation of “Libor”, has many companies working in the loan market with a leverage to change the reference index on their debt. Often, these businesses have tried to exclude the compensatory amendment that investors are supposed to compensate for the new index, the one -night financing price (SOFR), usually lower than ‘lipur’. The guaranteed loan obligations managers, which contain loans with leverage in the form of effects with different risk levels and value, note that some companies will get big profits at this stage if it does not add compensatory margin because it will reduce the benefit that companies pay. Holders of the lowest mortgage, also known as shares of shares, were threatened by millions of dollars because it is the last to receive payments after paying the rights of all other investors. According to the persons familiar with the case, the contact between the stock disc campaign in the guaranteed loan funds, before the final transition date, is part of the scope of the investigation by the plaintiffs. A potentially legal vulnerability is likely to lose in the shift, as their returns depend on excess cash flow of basic loans, after paying the fees of higher debt holders. Given the high financial leverage integrated into the structure of these funds, any decrease in the benefits of reducing the returns. According to the anti -monopoly law, competitors are prohibited from achieving economic profits. Since every investor in guaranteed loan obligations is an independent entity, their potential agreement on United Financial Conditions can be regarded as an explicit legal offense. In criminal cases related to collusion or price manipulation, the claim must prove the existence of an agreement between the parties, but without the need to prove the existence of real economic damage, which gives investigators an extra benefit in the case of the hearing. However, if the government decides to charge, you must persuade the jury that the actions are caused by complicity, not of simultaneous but independent decisions by companies.