The $84 billion U.S. CLO market continues to find innovative ways to evolve and increase efficiency. One of the latest involves a refinancing mechanism that skips the typical process and costs of issuing a new set of notes for lower coupons. LCD/S&P GlobalSancus Capital was able to receive a no-action letter from the SEC on Sept. 1, 2016, opening the structure up to other interested CLO managers. Upon successful completion of the process, existing notes will be transferred at par plus accrued interest from the existing holders to the winning bidders at the new levels. The retention holder will still have the coupons on its notes reset if the AMR process is ultimately successful.

Source: Forbes October 05, 2017 13:30 UTC