Blow for CLOs as managers caught in risk retention net

New European risk retention rules for securitisations have delivered a vicious blow to the nascent CLO revival in Europe, writes Joe McDevitt. Bankers fear that a new proposal that brings CLO managers into the scope of the so-called "skin in the game" requirement — which dictates that the sponsor of a deal must retain a 5% vertical slice of the structure — will change the nature of the market forever.