According to the LSTA's 3rd Quarter Trade Data Study, annual trade volumes had remained range-bound in the $400 billion context from 2010 through 2012, but in 2013 volumes hit a near record $517 billion. So far in 2014, the pace has picked up and has done so rather dramatically.
Yesterday morning the FDIC voted to adopt a final rulemaking implementing credit risk retention as required by Section 941 of the Dodd-Frank Act ("Final RR Rule"). These proposed "skin in the game" rules for asset-backed securities were designed to align the interests of investors and securitizers of originate to distribute securitizations, but also captured CLOs.
Despite industry warnings, federal regulatory agencies have announced the terms of the final risk retention rule, which will negatively impact American credit markets and make financing for U.S. companies more expensive and scarce.
On October 21, 2014, the LSTA Published the Exposure Draft of the Syndicated Secured Loan Credit Default Swap Physical Settlement Rider. The Rider is being revised to reflect recent updates to the LSTA secondary loan market documents as well as certain other clean-up changes.
At long last, more than four years after Dodd-Frank became law, the Federal Reserve Board has scheduled a vote on final rules implementing risk retention for CLOs and other securitization vehicles. The hearing will take place at 3:30 next Wednesday, October 22nd and much is at stake for CLO managers and the market generally.