Will the Proposed US Credit Risk Retention Rules Apply to Your Transaction? | White & Case LLP International Law Firm, Global Law Practice
Will the Proposed US Credit Risk Retention Rules Apply to Your Transaction?

Will the Proposed US Credit Risk Retention Rules Apply to Your Transaction?

In response to the Dodd-Frank Act's "skin in the game" requirements for participants in asset-backed securities transactions, certain Federal agencies have released proposed risk retention rules that require "sponsors" of a securitization to retain a 5 percent interest in the credit risk of the underlying asset-backed securities. The definition of "asset-backed security" is broad and, depending on the specific structure of each transaction, may pick up finance subsidiaries, project bonds and other structured financings.

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