While leverage continues to drift higher in the market, it appears investors are happy to accept lower levels of premium on credit-based assetsQuantquistador
Almost four years ago the US Securities and Exchange Commission and US Federal Reserve implemented capital reserve requirements such that collateralized loan obligation (CLO) sponsors would be required to invest capital in the CLOs they manage – a structural change designed to align the interests, and more importantly, the risk exposures, of sponsors with that of investors. The requirement was set in motion as part of a large swathe of regulatory changes implemented under Section 941 of the Dodd-Frank Act.
However, in a somewhat surprising move . . .
This content is exclusively for paying members. Access all of our content on including years of timeless investment news and in depth analysis for only a few dollars a month by signing up here while also supporting quality content and journalism, or learn more about our premium content here
If you are subscribed and having an account error please clear cache and then cookies if that does not work email firstname.lastname@example.org and we will get back to you as quick as humanly possible