Collateralized Loan Obligations

News & Analysis as of

Credit Risk Retention Final Rule: Enforcement and Compliance Considerations

Predicting enforcement of the final rule regarding U.S. risk retention is an uncertain task. This OnPoint is designed to provide guidance on possibilities related to consequences of non-compliance, enforcement approaches by...more

CLO Risk Retention: The Headline Hurts; the Hit, Not So Much

More than a year after the Office of the Comptroller of the Currency of the Department of the Treasury, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Securities and...more

Joint Federal Regulators Approve Final Risk Retention Rules

On October 21 and 22, the Fed, HUD, FDIC, FHFA, OCC, and SEC jointly approved final risk retention rules. The final rules, which implement Section 941 of Dodd Frank, generally follow the re-proposed rules issued in August...more

U.S. Regulatory Update–Final Rules: Credit Risk Retention for CLOs

Call to Action: The final risk retention rules will change the status quo for nearly all CLO managers beginning in the fourth quarter of 2016. All managers should begin assessing whether and how they will comply with the...more

Regulators Adopt Risk Retention Rule with Few Changes

A final credit risk retention rule was recently issued with respect to asset-backed securities (ABS) by the prudential bank regulators (the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance...more

Final US Risk Retention Regulations Will Affect CLOs: Preliminary Thoughts On The New Regime

Contrary to many industry comments the new rules will require managers of open-market CLOS to retain risk. On October 21, 2014, six US federal regulators (the Agencies) began voting to adopt final rules implementing...more

U.S. Risk Retention Final Rule: Playing it Forward for CLOs

We will leave the hand wringing and teeth gnashing to others. We expect there will be a lot of that in the days ahead. We have had our say on the misguided premises and tortured statutory interpretation underpinning the final...more

CLO Market Update: S&P Recovery Ratings, More’s the Merrier

While leveraged loan ETF and money market funds face an unsteady near-term future amidst ongoing retail investor outflow, the CLO market is rolling towards its busiest year ever. With year-to-date global issuance at...more

CLO Market: The Volcker Rule and Risk Retention

Collateralized Loan Obligations (CLOs) are a type of Collateralized Debt Obligation (CDO) created by pooling large commercial loans and debt instruments. This pool is divided into various tranches with different risk–return...more

EU Risk Retention Rules and CLOs – the Journey’s End?

Although the legislative process is now complete, the process of structuring CLO transactions to comply with the EU risk retention rules has just begun. The EU’s risk retention framework will come into effect next...more

Dodd-Frank News: May 2014: Dodd-Frank Wall Street Reform and Consumer Protection Act Update

In This Issue: - RECENT CASES ..Preemption ..CFPB Involvement in Litigation ..CFTC Regulation of Retail Commodity Transactions ..Durbin Amendment ..Appraiser Disclosure Requirements Under...more

U.S. House Approves Volcker CLO Fix

On April 29, the U.S. House of Representatives passed by voice vote HR 4167, a bill that would exclude certain debt securities of collateralized loan obligations (CLOs) from the so-called Volcker Rule’s prohibition against...more

Fed Issues Additional Guidance on Extended Conformance Period – Be Careful What You Ask For

A few steps forward and a giant leap back. This familiar phrase might be the perfect summary of the CLO market’s Volcker Rule roller coaster since December 2013. A few weeks ago we wrote about the Federal Reserve Board’s...more

CRE Securitization: Rehabilitation Still In Progress

During the past several years, CRE Securitizations were airbrushed off the financial products reviewing podium like a discredited Politburo member. Not here, never ever here; nope, never heard of it. This was a mistake rooted...more

Federal Reserve Extends Compliance Period under Volcker Rule for Collateralized Loan Obligations

While collateralized loan obligation vehicles (CLOs) may ultimately have to be divested by “banking entities” subject to the Volcker Rule, the Federal Reserve Board (the Board) recently extended the compliance period for...more

Federal Reserve Extends Compliance Deadline for CLOs

On April 7, the Federal Reserve Board (Board) announced that it intends to exercise its authority to give banking entities two additional one-year extensions to conform their ownership interests in, and sponsorship of,...more

Federal Reserve Extends Volcker CLO Compliance Period

On April 7th the Federal Reserve Board (the “Fed”) announced that it would provide banking entities with two additional one-year extensions to conform their ownership of CLOs covered by the Volcker Rule. The Fed stated that...more

Corporate and Financial Weekly Digest - Volume IX, Issue 15

In this issue: - SEC Issues New FAQs on Conflict Minerals - SEC Issues Frequently Asked Questions Regarding the Amendments to the Broker-Dealer Reporting Rule - FINRA Requests Comment on Rules Regarding...more

Rating Agency Developments - January 28, 2014

On January 23, Fitch released its criteria for analyzing interest rate stresses in structured finance transactions and covered bonds. On January 22, DBRS released its methodology for rating wind power projects. On January 22,...more

European CLO 2.0 Issuer Jurisdiction Quick Reference Guide

New issuance of collateralised loan obligations (“CLOs”) rose last year to its highest level since the credit crunch. 2013 saw U.S. CLO issuance rise to about US$81 billion, from US$54 billion the year before while European...more

EU Risk Retention Requirement: A Workable Solution For US CLO Collateral Managers?

Background - Article 405 of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU)...more

Financial Services Law -- Jan 17, 2014

Community Banks and the Volcker Rule: What’s Next? - For now, banks that have investments in CDO securities that are issued by funds that are invested in trust preferred securities (TruPS CDOs) have dodged a bullet. On...more

The Final Volcker Rule: Impact on Securitizations

On December 10, 2013, five U.S. financial regulators (the Agencies) adopted a final rule implementing the Volcker Rule (the Final Rule). The text of the Final Rule and its accompanying lengthy preamble (collectively, the...more

CLOs Under the Volcker Rule: New Exemptions, New Issues, New Obligations

Under the final version of the Volcker Rule issued this week, issuers and sponsors of new CLO issuances should consider structuring CLOs to conform to the exclusions contained in the rule, and banks and bank affiliates that...more

Global Financial Market Insight - November 2013

Welcome - With recovery in financial markets starting to take hold it is an exciting time to launch our Global Financial Markets Insight. The purpose of our new quarterly is to help guide new and experienced users of...more

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