CLO market mulls possible rules suspension; York prices $408 CLO; CVC refinances

By Cristal Cody

Eureka Springs, Ark., Nov. 10 – CLO issuance and refinancing action remains strong ahead of risk retention regulations that take effect in December.

Meanwhile, regulations that fall under the Dodd-Frank Act may be removed when Donald Trump takes office.

Moody’s Investors Service said in a news release that Donald Trump’s victory in the presidential election will impact a range of companies and policy areas, including trade, health care, immigration and corporate taxes.

“In the area of financial sector regulation, Trump has stated his intention to temporarily suspend all new regulation and also proposed eliminating the Dodd-Frank Act,” Moody’s said. “While a reduction in regulatory compliance costs would bolster bank earnings, reduced oversight and a roll-back of requirements would also result in a weakening of banks' capital and liquidity positions, a negative from a credit perspective.”

In new issuance, York CLO Managed Holdings, LLC priced $403.2 million of notes in the firm’s second CLO deal of 2016. The CLO does not comply with U.S. or European risk retention regulations but does not permit the purchase of bonds and letters of credit to address Volcker Rule concerns.

CVC Credit Partners, LLC priced a $370.65 million refinancing and reset of a vintage 2013 CLO deal.

U.S. CLO volume totals more than $90 billion, while more than $18 billion of U.S. CLOs have been refinanced year to date.

In the secondary market, $64.1 million of high-grade CBO/CDO/CLO issues and $271 million of non-investment-grade securities traded on Wednesday, according to Trace.

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