The Loan Syndications and Trading Association and 16 agent banks have agreed on guidelines that lay out a timeframe for banks to apply for CUSIPs. It is the association's ultimate goal to have CUSIPs applied to all leveraged deals by the end of this year.
The LSTA held a meeting with the banks Oct. 19 to hash out the guidelines, which recommend that banks should apply for CUSIPs on or before the date a deal closes, and no later than 24 hours following the close. There is a 24-hour grace period for some deals. The association set the guidelines because it can take several days for some banks to apply for CUSIPs. In some cases, banks do not apply for them at all, said Ellen Hefferan, project manager at the LSTA. The fact the association has established these guidelines is a big improvement, she said.
At the LSTA's annual conference two weeks ago, Allison Taylor, executive director of the LSTA, said a couple of banks are restricting CUSIPs and called for the market to join its efforts to have CUSIPs applied to all loan deals. One reason certain banks might not be publishing CUSIPs is because borrowers are asking agents not to. Hefferan said she does not know why CUSIPs are not always published, but added, "If the borrower is not traditionally used to CUSIPs, it could take time for it to get used to them and to become comfortable with them prior to their publication."
She added that banks are making good progress on applying for CUSIPs and that she had received a lot of applications over the past week. Going forward, Hefferan will work with four buyside shops to see how many deals the buysiders are invited to participate in have CUSIPs assigned to them.
Currently 4,010 facilities have CUSIPs. Of these, 45% were applied for this year. Ultimately, the LSTA wants to have all vendors, agents and buyside shops using CUSIPs.