CLO market splits en route to Volcker rule compliance
Volcker rule amendments freeing CLOs from many of the restrictions of the past decade came into law on 1 October, allowing managers greater flexibility in how they invest their portfolios. But the market is split on how exactly CLO documents should be structured as the first slate of unrestricted CLOs print

Kroll pays $2 million settlement over control failures in rating CLOs and CMBS
The Securities and Exchange Commission has charged Kroll Bond Rating agency more than $2 million for failures related to rating CLO combo notes, as well as in the CMBS sector

Dislocation and costly payment debacle highlight loan tech lag
Coronavirus-led dislocation in the leveraged loan market, as well as a bank’s recent claims of human error in making a large loan payment, underscore the industry’s need to embrace long-overdue efficiency improvements

CLOs given workout flexibility as ‘safe harbour’ now viable
From October CLOs will be permitted to hold equity secu-rities resulting from workout situations, say lawyers at Cad-walader, Wickersham & Taft

Changes in scope for CDS indices and tranches ahead of roll
Structural changes look to be afoot globally for CDS indices and tranches ahead of the September roll, with IHS Markit weighing amendments to products in all three traded regions

Founder of west coast direct lender charged with fraud
Brendan Ross, founder and former chief executive officer of Direct Lending Investments, was arrested and charged with 10 counts of wire fraud yesterday, amid allegations he inflated the value and returns for a fund investment, resulting in mis-statements to investors and around $5-6million in overcharged fees

Managers advised to refresh disclosures after SEC risk alert
Credit managers should review their conflict disclosures after the SEC issued a risk alert, say lawyers

Volcker change for CLOs may be subject to US election outcome, says LSTA
Changes to the Volcker rule that would allow CLOs to hold up to 5% of their portfolios in high yield bonds could be subject to the outcome of the US general election in November, the LSTA has said

It takes just a few CLO collateral managers selling into the distressed community to start cracks forming
It is becoming increasingly clear that CLO collateral managers need to improve their collaboration efforts in distressed situations

Sidecars give CLOs a shot at driving restructurings
A number of CLO managers are shifting defaulted assets into sidecar vehicles before their transactions close - and sources say a growing number of debt investors are warming to the idea

US swaps rule relaxation brings underperformance of bank CDS
US Federal Reserve changes to the Volcker rule has caused bank stocks to surge, but credit market perceptions are less positive

Fed allows bonds to return to CLOs from October and signals equity rule change
The US Federal Reserve has finalised amendments to the Volcker rule that will allow CLOs to hold 5% bond buckets. The regulation implies CLOs' ability to hold equity securities may also change

Fed expands scope of Main Street lending programme
The Federal Reserve Board has expanded the scope of its Main Street Lending Programme to allow more small and medium-sized businesses to participate

Ares fined $1 million by SEC over 'misuse of non-public information'
Ares Management has been fined $1 million by the US Securities and Exchange Commission in a settlement surrounding compliance failure relating to a portfolio company

It's confirmed: loans are not bonds in " victory for the flow of capital to American businesses"
You're a loan. No, nothing to do with lockdown and social distancing. It's actually a victory for the $1.2 trillion US loan market as a court ruling finds that loans are not securities in the long-running Kirschner v. JP Morgan Chase case

Fed announces first loan subscription date for talf
The Federal Reserve Bank of New York announced yesterday that the first loan subscription date for the term asset-backed securities loan facility will be 17 June and the first loan closing date will be 25 June

CLO market welcomes 'favourable and surprising' revisions to talf, but issues remain
CLO participants are welcoming the 'many favourable and even pleasantly surprising' revisions to the term asset backed lending facility announced by the US Federal Reserve today to address previous concerns. This could help reignite the market, but some issues were not addressed

The CMBS talf proposal is simple and effective. A similar approach for CLOs would be welcomed
It’s great that government is trying to boost securitisations, but they’re missing the mark for CLOs

Fed expands Main Street direct lending scheme but it's unlikely to help CLOs
The US Federal Reserve Board has expanded the scope of its Main Street Lending Programme following more than 2,200 letters of feedback. Under the third loan facility, lenders will hold 15% of the loan to borrowers with greater leverage

Fed to publish information on borrowers making use of the talf programme
The US Federal Reserve will disclose information about borrowers making use of its emergency facilities

VAT guidance leaves CLO managers in 'limbo' as they weigh options
The Dutch Tax Authority’s move to ease the pressure on European CLO managers by grandfathering deals against VAT until at least January 2021 has drawn mixed responses

European CLOs earn VAT wiggle room - and varying grandfathering protection
European CLOs domiciled in the Netherlands have been given some breathing room as various stock exchange announcements suggest the Dutch Tax Authority (DTA) will not retroactively impose VAT bills on CLOs

SEC proposes new fund valuation framework
The US Securities and Exchange Commission has proposed a new framework for funds to determine fair value for assets for which market quotations are not readily available, which it says will "improve valuation practices and thereby protecting investors and improving market efficiency, integrity and fairness"

SEC temporarily relaxes regulations for BDCs
The US Securities and Exchange Commission has provided business development companies with temporary relief in light of covid-19 - including the ability of BDCs, who are unable to satisfy asset coverage ratios, to use an alternative form of calculating leverage

Fed commits $600 billion to SMEs in Main Street Lending facility
The US Federal Reserve has committed to buy up to $600 billion in loans to small and medium-sized businessness through its Main Street Lending Programme. The programme will sit alongisde the existing Payroll Protection Program (PPP), a separate facility exclusively for small businesses