US issuance of Collateralised Loan Obligation (CLO) funds is set to rise following a US Court of Appeal decision on 9 February exempting them from Dodd-Frank risk-retention rules. The ruling should make it easier for smaller managers to raise deals. It removes the requirement that managers hold 5% of the capital in their funds. Morgan Stanley increased its 2018 US CLO forecast by $110bn to $10bn110bn following the ruling, and Deutsche Bank raised its forecast to $120bn from $10bn110bn. CLO issuance increased more than 700% by volume in the year to 16 February, compared with the same period in 2017.
US issuance of Collateralised Loan Obligation (CLO) funds is set to rise following a US Court of Appeal decision on 9 February exempting them from Dodd-Frank risk-retention rules. The ruling should make it easier for smaller managers to raise deals. It removes the requirement that managers hold 5% of the capital in their funds. Morgan Stanley increased its 2018 US CLO forecast by $10bn to $110bn following the ruling, and Deutsche Bank raised its forecast to $120bn from $110bn. CLO issuance increased more than 700% by volume in the year to 16 February, compared with the same period in 2017.