CLO Market to Shrink 75% Due to Proposed Rule, LSTA Survey Says
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The market for collateralized loan obligations in the U.S. will shrink by at least 75 percent if proposed risk retention rules are implemented, according to the Loan Syndications and Trading Association.
The findings are based on a survey by the LSTA of 35 money managers overseeing $228 billion in assets. More than half the respondents said they don’t have access to the capital needed to meet the rule proposed by the Dodd-Frank Act, which would require them to hold at least a 5 percent stake in debt they package and sell.