It’s official: collateralized loan obligations issued prior to Dec. 24, 2014 can be refinanced without triggering a requirement that managers keep “skin in the game.”

On July 17, the U.S. Securities and Exchange Commission published a “no-action” letter in response to a request from Crescent Capital Group, a CLO manager based in Los Angeles. Crescent’s law firm, Cleary Gottlieb Steen & Hamilton LLP, had asked the Commission whether it would take enforcement action if a collateral manager refinanced a CLO and did not retain 5% of the newly issued securities under forthcoming U.S. risk-retention standards.

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