Arranger risk retention ‘a unicorn’ says LSTA exec

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By Will Caiger-Smith
21 Oct 2014

A secondary option for risk retention in collateralised loan obligations, proposed by the FDIC in the final version of the Dodd-Frank rules on Tuesday, has been dismissed as “completely unworkable” by a senior executive at the Loan Syndications and Trading Association.

Forcing managers to retain a 5% vertical or horizontal slice of their deals was always expected to be the way regulators would force CLO sponsors to have skin in the game when issuing new deals. That was confirmed in the final version of the rules, which was released ...

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