The U.S. CLO market is experiencing another rash of refinancing, defying expectations for a slow start to the year.

Like the refinancing that managers raced to complete before Dec. 24, 2016, this activity is driven by a desire to avoid retaining skin in the game, in the form of 5% of the economic risk of deals. Managers of existing collateralized loan obligations deal who wished to make extensive changes, such as raising additional funds or extending the investment periods of deals, had to do so before Christmas Eve or they would no longer be grandfathered from the Risk Retention Rule.

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