US Supreme Court Declines to Review Ruling that Syndicated Loans Are Not Securities

The order marks the end of the Kirschner case, which had threatened to expand US securities regulation to syndicated loans.

The US Supreme Court has denied a petition for certiorari review in the Kirschner case, in which the Second Circuit Court of Appeals upheld a lower court ruling that syndicated term loans are not "securities". As a result, the Second Circuit Court decision stands, and the loan market may continue to operate on the understanding that broadly syndicated term loans will not be subject to securities regulation.

The Loan Syndications & Trading Association (LSTA) celebrated the outcome as "a great – and critical – result for our market". The LSTA had filed amicus briefs in the case in collaboration with other industry organizations, advocating for the position that syndicated loans are not securities

For more on the case, see our August 2023 alert on the Second Circuit Court’s decision here, and our June 2020 overview of the original ruling of the US District Court for the Southern District of New York here. Both decisions relied on the 1992 Second Circuit ruling in Banco Espanol de Credito v. Security Pacific National Bank, a case in which the Supreme Court similarly denied a certiorari petition.

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