The NAIC’s Super Bowl Sunday memo seems to suggest regulations may not change greatly

The second Trump presidency is likely to turbocharge already frothy markets
The impact of Trump’s second term in the Oval Office will be wide-ranging for the US and the world. For credit markets, his return to power portends more intense competition between banks and private credit, and frothier deals.

We understand why the NAIC is open to a new framework
The NAIC is right to tread carefully as it looks to protect its members from ratings arbitrage

"When the US market gets legislation it does not like, people sue..."
The difference between Americans and Europeans in regards to CLOs

We’ll get through this awkward patch
Wide liabilities have made pricing CLOs trickier in the past few months. But speakers at Creditflux’s CLO Symposium were optimistic that the arbitrage is OK — so long as you can place those triple As

Past returns: Insurers weigh CLO barbell trade to fight Solvency II
Five years ago in Creditflux we reported that insurers in Europe were putting on a CLO barbell trade in reaction to Solvency II regulations which came into effect in January 2016

Points up front: Risk retention gets less than 5% of airtime
In a sign of how buoyant the CLO market is, risk retention was hardly mentioned at Creditflux’s CLO Symposium. Milbank partner John Goldfinch gave a self-deprecating assessment... 

"Do not rush to set up a check-box approach with negative screening and start de-investing"
Instead of rushing through an ESG framework, asset managers need to adopt a long- and short-term approach

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

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

New accounting rules could be the axe that decapitates zombie credits

Regrettably, a small number of CLO debt investors insist on ‘hardcoded’ Sofr replacement provisions
Sofr looks like the most likely candidate to replace Libor, but it is still risky to write it into CLO documentation

Past Returns: German direct lending’s overhaul
In Creditflux five years ago we reported on German fund managers campaigning against regulations which dictated that funds require a banking licence to act as direct lenders. In 2016 they got their way as the German Banking Act stipulated that the banking licence requirement would not be imposed if a direct lender was authorised under the Alternative Investment Fund Managers Directive.

What price lender integrity if myriad interpretations mean nobody knows where they stand?
Net short language is seeping into loan documentation. The problem is that some funds may not know their net position

The resolution of narrowly tailored credit events is a leap forward for the CDS market
Isda is replacing the mechanistic determination of a failure-to-pay credit event with a more subjective rule

Japanese investors must confirm assets are appropriate... CLO managers can provide assurances
The stipulation that Japanese banks invest in appropriately formed assets is unlikely to hurt the CLO industry

They said it: I dedicated eight years of my life to it - so yes!
European Banking Authority principal policy advisor Christian Moor is asked whether the creation of the Simple, Transparent & Standardised label has been worth the effort

Past returns: Bond buckets are pipedreams, right?
Five years ago in Creditflux we reported that Webster Bank’s CLO tranche investor Francis Mitchell had created a working group in response to the Volcker rule determining that regional banks could no longer invest in CLOs with bond buckets

They said it: My friend (not a fan of the president) said she would erect a statue of Trump if there was any further Volcker rule rollback
A US lawyer tells us that President Donald Trump is gaining admirers in the credit industry.

Past returns: KKR CLO was sign of things to come
Five years ago in Creditflux, we reported on KKR Credit pricing a US CLO that complied with European risk retention rules, in what was believed to be one of the first deals of its kind

They said it: regulators are using The Big Short as their frame of reference
The LMA’s Nicholas Voisey describes why it’s difficult to campaign for the European loan market

Past returns: Europe's own risk retention rewrite
Five years ago we reported that European CLO managers were hunting for partners to retain risk retention on their behalf. Shortly after, regulators performed a U-turn (nothing new here) and decided to prohibit third parties from acting as risk retainers

They said it: CLO managers are a generous sort
With US risk retention set to be repealed, one CLO equity investor is convinced that managers will readily return 'risk retention capital' to investors

Market is always wrong on effect of CLO rule changes
Risk retention has made little difference to the CLO industry. And it’s disappearance will similarly have little impact

Points up front
Legal documents related to a now defunct fund run by Carlyle a decade ago, highlight tensions between two senior portfolio managers