The $800 billion U.S. leveraged-loan market is losing mutual-fund investors just as it's about to need them more than ever.

Regulators are approving new rules this week making it more expensive to create funds that are the biggest source of demand for the below-investment-grade debt: collateralized loan obligations (CLOs). Managers of the funds will be required to retain 5 percent of the debt they package or sell, or banks underwriting CLOs will have to hang on to a piece.

The Loan Syndications & Trading Association, the market's main lobbying group, said yesterday the rule will "materially reduce the CLO market."

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including and

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.