The race is on to save the biggest buyers of leveraged loans from the financial world's endangered species list.

Less than five months remain before strict new curbs are imposed on managers of collateralized loan obligations, which purchase and repackage about 60% of the loans used to help fund U.S. takeovers. Sales of CLOs have already plummeted by more than half this year to $32 billion partly in anticipation of the rules, which were written in the aftermath of the 2008 financial crisis and take effect Dec. 24. After that, CLO managers such as Carlyle Group LP and Apollo Global Management LLC must retain a 5% stake in the products they help create — a change that trade associations say will sap funding for corporate America.

In a battle for hearts and minds, the industry is lobbying politicians, tweeting the merits of leveraged finance on social media, encouraging companies to write letters of support, and suing regulators to soften the impact, with little success so far. Rule makers intent on squelching risks to the financial system are standing firm, and every day that passes makes a compromise before the deadline less likely.