Credit risk retention rules adopted in October 2014 by several federal agencies have hamstrung the CLO market. Now Rep. Andy Barr (R.-Ky.) has introduced a bill (H.R. 4166) that would create a “qualifying CLO” exemption to the Dodd-Frank risk retention rules. “This meaningful change would support continued investment in CLOs, while still ensuring adequate safeguards through standards on the quality of assets, portfolio diversification, minimum capital structure, alignment of interests, and proper reporting and disclosure and manager regulation,” says Tom Quaadman, vice president of the Center for Capital Markets Competitiveness, U.S. Chamber of Commerce.

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