Diane Roberts

This Practice Note considers how the possession of information (particularly confidential and material non-public information) impacts on the secondary loan market. In particular, it considers whether loan trading is a regulated activity, the use of information barriers and ‘Big Boy’ letters in the secondary loan market and the relevant market guidelines issued by the LMA and other trade associations in relation to the handling of sensitive information by participants in the secondary loan market.

This Checklist identifies the key factors that you should consider when advising a prospective party in relation to a trade using secondary debt trade documentation (par) published by the LMA. This list is not exhaustive. In particular commercial due diligence covering the financial condition of the obligors, industry and other matters would be conducted pre-trade but are beyond the scope of this checklist. Additionally, certain terms of trade are credit-specific, and can only be referenced generally. In this Checklist, we assume that the debt in question is performing and that the obligors are not in any form of restructuring or insolvency/bankruptcy.