(NY) CLO Market Ignored by Volcker CDO Decision | White & Case LLP International Law Firm, Global Law Practice
(NY) CLO Market Ignored by Volcker CDO Decision

(NY) CLO Market Ignored by Volcker CDO Decision

US regulators have yet to make a concrete decision as to whether collateralized loan obligations (CLOs) are debt investments prohibited under the Volcker rule following a recent update regarding collateralized debt obligations. In the interim, banks subject to the Volcker rule will have to structure pending CLOs to meet current exemptions or, if they hold existing CLO securities, such banks will need to shed investments that pose compliance issues.

"Conversations regarding finalizing language in new CLO deals will likely intensify after this decision," said Charles Pesant, a partner in the Securitization practice at White & Case. "While the timing around any potential Volcker relief is uncertain, the market can now at least move forward knowing that a decision may not come soon, if at all."