CLO Headaches Loom With EU Ban on Caymans Over Money Laundering
- EU to effectively blacklist Cayman with new regulations
- U.S. CLOs sold to EU buyers may switch to Jersey or Bermuda
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European regulators are creating trouble for managers of U.S. collateralized loan obligations that typically sell some of their bonds to investors in the region.
In the coming weeks, the European Union is likely to add the Cayman Islands to its list of jurisdictions that have “strategic deficiencies” in areas including anti-money laundering and counter-terrorist financing regimes, according to a January note from law firm Clifford Chance. That effectively blacklists them for European investors, the note said.