"The Securities and Exchange Commission and the Commodity Futures Trading Commission have decided not to define loan participation agreements as swaps." writes Allison Bisbey of Leveraged Finance News.
This is good news for banks and loan investors as these sorts of transactions, in which “the original lender sells the rights and risks associated with a loan, but remains the lender of record,” will not fall under Dodd-Frank regulations on swaps. "Though loan participations have never been treated as derivatives, they had many of the characteristics of swaps as defined in proposed rules," Bisbey explains.
It was "an important and clear win" for the loan market, according to Bram Smith of the Loan Syndication and Trading Association.
For the full piece see: "Loan Buyers, Sellers Dodge a Dodd-Frank Bullet" (may require subscription).