D.C. District Court Disappoints with Risk Retention Ruling

December 22, 2016 - The federal District Court for the District of Columbia ruled on December 22nd, 2016 against a risk retention solution for collaterized loan obligations (CLOs). The LSTA strongly believes that the court erred and that the agencies inappropriately applied the risk retention rule to CLO managers. CLOS performed extraordinarily well before, during and after the financial crisis; they are not the product that the Dodd-Frank law intended to fix. The risk retention rules will reduce the availability and increase the cost of credit for job-creating American employers that rely on the financing CLOs provide, and the LSTA seeks a resolution that will work for all constituencies. 

The LSTA will consider all options over the coming days, including appealing the decision to the federal Court of Appeals for the D.C. Circuit.


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