Volcker Rule repeal not expected to pass Senate; securitized secondary market active

By Cristal Cody

Tupelo, Miss., June 9 – Market participants were weighing the potential outcome after the U.S. House of Representatives voted on Thursday to overturn parts of the Dodd-Frank Act, including the Volcker Rule, but the bill as stands is widely expected to fail in the Senate, sources report.

New CLOs priced since December are required to be in compliance with the Volcker Rule, which prohibits collateral of bonds, senior secured notes and other non-loan assets.

Year to date, more than $30 billion of new CLOs and more than $81 billion of refinanced CLOs have priced, according to market sources.

In other action, the securitized secondary market has been active with volume of $108.94 million in non-investment-grade CBO/CDO/CLO issues and $193.97 million of non-high-grade securities on Thursday, according to Trace.

On Wednesday, $108.32 million of high-grade securities and $163.4 million of non-high-grade CBO/CDO/CLO issues were traded.

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