Lawyers tout fixes for CLO risk-retention woes
The ink was still drying on new US risk-retention rules as lawyers sprang into action. Affiliates and other third parties can hold the risk, they claim, while still satisfying both US and European regimes. Not everyone is convinced. By Kris Devasabai
A New Yorker cartoon from 2009 shows two executives sitting around a desk littered with documents. "These new regulations will fundamentally change the way we get around them," one of the men says to his colleague.
That essentially sums up the securitisation industry's response to the credit risk-retention rule adopted by US regulators on October 21. Within hours of its release, law firms were deluged with calls from issuers of collateralised loan obligations (CLOs) and other asset-backed
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