You Can Fight City Hall

It seemed like a very gutsy move at the time.

In October 2014, the LSTA filed a lawsuit against the SEC and the Federal Reserve Board, claiming that CLOs should not be covered under Dodd-Frank’s risk retention rules. These rules, arising from the credit crisis, required parties that securitized assets to retain at least 5% equity in those vehicles.

The LSTA, the loan industry’s advocacy organization, argued that CLO managers, unlike sellers of student loans or home mortgages, already had economic interests in their vehicles. Additional “skin in the game,” they said, was not required.

On Friday DC Circuit’s Court of Appeals agreed. In a 17-page ruling, the Court decreed that “given the nature of the transactions performed by CLO managers, the language of the statute invoked by the agencies does not encompass their activities.”...

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Quote of the Week

“I wouldn’t say it’s over yet.” – Eric Davidson, chief investment officer, Wells Fargo Private Bank.

Chart of the Week: New Vehicles on Board

New CLO formation for the coming year is projected by market participants to approach 2017 levels.

Lead Left Spotlight

Phil Seefried

President

Capstone Headwaters

"The people are everything but what is most important is how they work together and how their platform supports them."

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Jim Hudak

President

CIT Commercial Finance

""We focus on sponsors we’ve worked well with through the crisis. It’s really an efficient way to market nationally.""

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Upcoming Interview: Rob Morris

Founder and Managing Partner

Olympus Partners

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Upcoming Interview: Ken Wormser & David Powar

Managing Partners

GreensLedge

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Upcoming Interview: Brad Raymond

Head of Investment Banking

Stifel Financial

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Features

Markit Recap – 2/12/2018

iTraxx skew widens amid volatility Rates and equity markets are now embroiled in a tussle that has upset the pervasive complacency evident at the beginning of the year. Has this affected the credit markets? Naturally. The primary credit indices experienced considerable volatility; perhaps not as newsworthy as the VIX, but notable nonetheless....

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Leveraged Loan Insight & Analysis – 2/12/2018

M&A loan financings comprise 30% of completed U.S. leveraged issuance this quarter The U.S. leveraged loan market continues to chug along at a steady pace. So far this quarter there has been US$110bn in completed leveraged loan issuance. The mix of deals comprises a healthy chunk of M&A. There has been US$33bn in completed leveraged

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The Pulse of Private Equity – 2/12/2018

How much potential is in the middle market? Quite a bit Download PitchBook’s 2017 Annual US PE Middle Market Report click here. The middle market continues to outpace the broader private equity market. According to PitchBook’s 2017 Annual US PE Middle Market Report, deal volume in the $100M-$1B range last year was about even with

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Private Debt Intelligence – 2/12/2018

Private Debt Fundraising Momentum Private debt funds achieved final closures in 2017 faster than in any year since 2008, taking an average of 14 months to reach a final close. This is a sharp drop from 2016, when funds took an average of 19 months to reach a final close – the highest average of

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