Federal Judge Grills Regulator on ‘Skin in Game’ Rule for CLOs

By Glen Fest

The central argument in a federal lawsuit challenging rules requiring CLO managers to keep “skin in the game” of their deals is that they were never in the game to begin with.This might carry some weight with the U.S. Court of Appeals in Washington, if oral arguments at a hearing last week are any indication.

Sign up today and take advantage of member-only content — the kind of timely, cutting edge industry insight that only Structured Finance News can deliver.
  • Asset Securitization Report one-month trial subscription
  • one-month trial subscription
  • Free e-newsletters
  • Free whitepapers

Latest News

Redwood Stops CMBS Lending; Will Others Follow Suit?

– Redwood Trust said Tuesday it will stop originating commercial mortgages for securitization and focus solely on investing in bonds backed by commercial mortgages originated by others.

225 Liberty Street Trust Issuing $765M in Commercial Bonds

– Citigroup, German American Capital Corp. and Wells Fargo are marketing $765 million in commercial mortgage bonds associated with the mortgage the three originated for lower Manhattan’s 225 Liberty Street skyscraper.

Fannie Preps 1st Conn Ave Risk Sharing Deal of 2016

– The Series 2016-C01 is the government-sponsored enterprise’s 10th credit risk sharing transaction under the CAS shelf, and the second offering exposure to actual losses, as opposed to estimated loses.

Markit Acquires JPMorgan Loan Trade Platform

– Markit has acquired systems integration software from JPMorgan that will allow the information services company to offer its global syndicated loan clients more automated trade processing services.


Featured Articles

Most Banks Are Shrugging Off Regulators’ CRE Warnings

– Bankers are defending the industry's aggressive push into commercial real estate despite regulators' warnings about the growing risk — and the potential for losses — in that sector.

Reimbursement, Not Timing, is Key to GSE Risk Sharing

– Kevin Palmer, senior vice president of credit risk transfer at Freddie Mac, hold that the timing of transactions offloading the risk of default on mortgages is less important than what he terms “reimbursement risk."

Energy Overweight CLOs Face Deteriorating Metrics

– The ongoing deterioration in crude oil prices is raising concerns that the energy sector’s distress will drag down CLOs that have overweight debt exposure to exploration/production and oilfield services firms.

CFPB's Auto Finance Push Hurts Consumers

– The way the Consumer Financial Protection Bureau is regulating the auto finance industry's relationships with dealers is simply wrong — both legally and ethically. It's also directly counterproductive to its goal of protecting consumers.

How REITs May Challenge FHLB Membership Rule

– The Federal Housing Finance Agency may face legislation or a lawsuit in the near future as it tries to force captive insurance companies to exit the Federal Home Loan Bank System,

The New Way CLO Managers are Financing 'Skin in the Game'

– Non-traditional loan facilities offer a number of advantages over equity financing. But these structures must balance a lender's right to foreclose with a manager's ability to stay in compliance with risk retention rules.

Community Banks Turn to New Kind of CDO to Raise Capital

– Raising capital has been tough for community banks ever since the financial crisis, especially the smallest ones. But a few investment firms have developed structured products that offer community banks a chance to band together to raise needed Tier 1 capital at relatively low cost.


SFN People Database

Exclusive data on top players in capital markets

Todd Baker

Managing Principal

Firm: Broadmoor Consulting LLC

In the news: Marketplace Lenders Are a Systemic Risk

Search the People Database

Current Issue

Why Florida May Be the Next Big Source of PACE Bonds

Property Assessed Clean Energy loans have been available in Florida since 2010, but lending, as well as securitization of these loans, has lagged far behind California largely due to a series of lawsuits. A ruling by the Florida Supreme Court in October could change that.

Current Issue