There’s a great deal of skepticism about the Trump Administration’s ability to effect regulatory relief. Yet some of the players most affected by rules enacted under Dodd-Frank are preparing for its potential repeal.
Since December, sponsors of new-issue securitizations have been required to keep 5% of the economic risk in deals. This has proven to be particularly onerous for sponsors of collateralized loan obligations, most of whom are asset managers will little balance sheet of their own. CLO managers have gone to great lengths to avoid triggering the requirement on deals that predate the rule.