Schulte Roth & Zabel partner Martin Sharkey shared his perspective on Morningstar DBRS (“Morningstar”) recently entering Europe’s CLO rating scene, with LevFin Insights. Morningstar had previously made inroads by rating European CLO warehouses and mid-market CLOs in the US. The firm is the first new company in 20 years to enter Europe’s CLO market, which has been dominated by ratings from Fitch, S&P and Moody’s.  

Breaking into this established market presents challenges due to various entry barriers. Although most investors are receptive to all rating agencies, banks tend to have preferred partners for arranging their deals. According to CRA 3 legislation, every rated structured finance debt tranche in Europe, including CLOs, must receive ratings from at least two agencies. 

“Though this requirement is in force, there’s no obligation to appoint a smaller rating agency,” stated Martin. “It just has to be a consideration during the dealmaking process.” 

The original idea was that the legislation might loosen the grip of the big three ratings firms, he said, but in practice it has not had that effect.

Learn more about Schulte’s CLO Group. 

Schulte Roth & Zabel Chief Innovation Officer and Chief DEI Officer John K. Johnson recently authored the article, “Schulte’s Culture of Connection and Belonging,” for Savoy Magazine, offering insights into the firm’s commitment to diversity, equity and inclusion (DEI). 

He outlined the firm’s DEI efforts, which are guided by four foundational principles: ensuring workplace equity, nurturing diverse talent, cultivating a sense of belonging and making a meaningful societal impact. Schulte’s inclusive approach—embodied by the “one firm, one team” ethos—paves the way for industry-leading inclusivity policies that extend to business professionals as well as lawyers. This inclusiveness is integral to the Schulte Code of Civility, fostering an environment of respect and trust. 

By setting an inclusive “one firm, one team” tone, the firm is leading the industry with more inclusive policies around business professionals, including opening our affinity groups and alumni programs to all lawyers and business professionals of the firm. This spirit is enshrined in the Schulte Code of Civility and sets a tone for a climate of mutual respect and trust. 

Schulte also actively seeks to create opportunities and develop diverse talent pipelines through partnerships with organizations focused on professional development for students from underrepresented groups—including those at the pre-law and high school levels, and first-generation professionals. 

Read more.