Take two for CLO Volcker relief bill

Congress
By Will Caiger-Smith
15 Sep 2014

A bill that would exempt certain collateralised loan obligations from the Volcker rule is up for consideration in the House of Representatives today. If it gets through Congress, it could ease fractious negotiations between bank investors in triple-A notes, CLO managers and holders of other tranches over whether or not to Volckerise legacy transactions.

Banks that hold CLO transactions that can invest in bonds as well as loans — only loan securitizations are exempt from the Volcker rule — have been frantically trying to get them restructured so they don’t have to sell them when the Volcker rule becomes effective.

Some managers ...

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