Final Hurdle Cleared for U.S. CLO Managers with Passing of Deadline
Final Hurdle Cleared for U.S. CLO Managers with Passing of Deadline

With the passing of the Thursday, May 11, deadline to appeal to the Supreme Court, U.S. open-market CLO managers are now free of Dodd-Frank ‘skin in the game’ rules U.S. News reports.

After three and half years of litigation secured a victory in the U.S. Court of Appeals for the District of Columbia, the threat of a Supreme Court review remained. Regulators had 90 days from the Appeals Court’s Feb. 9 ruling to ask for the review, which they chose not to do.

Paul St. Lawrence, a partner at law firm Cleary Gottlieb Steen & Hamilton said the market “has been operating on the assumption that this was going to be the state of play, but this has freed people up to make decisions based on what makes sense for marketing and a deal structure perspective, and not be locked into the risk-retention mandate they were before.”

Even with risk retention, U.S. CLO volume is up almost 43 percent year after year through May 8, with more than $43 billion of deals raised, according to Thomson Reuters LPC Collateral data.

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