Risk retention rules created some big hurdles to creating new collateralized loan obligations. Yet they also opened up new avenues for investing in the market, as many managers serving as fee-for-service agents were compelled to raise the capital necessary to keep “skin in the game.”

Four months in, investors are getting more comfortable with the complicated structures used to put managers into compliance. This helps explain why issuance is picking up steam after a slow start to the year, though there has also been a pickup in issuance of leveraged loans used as collateral. An unexpectedly strong April, when $10 billion of CLOs were issued, prompted S&P Global Ratings to boost its forecast for full-year issuance to $75 billion from $60 billion previously.

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