2021 was a banner year for CLOs in the United States and Europe. Although the CLO market had a slow start in 2022, some forecasters were still predicting between $155 to $160 billion of new issuance for U.S. CLOs for the year. European issuance was expected to be around €37 billion. However, inflation and rising interest rates created volatility in the market and the war in Ukraine brought an unexpected shock to it. Supply chain issues continuing from the COVID-19 pandemic were also exacerbated by the war and analysts have now adjusted their expectations downward. As a result, some CLOs in the United States have been offered with shorter non-call periods and shorter reinvestment periods. 

In this chapter for the International Comparative Legal Guide to Securitisation 2022, partner and co-head of the Finance & Derivatives Group Craig Stein and partners Phillip Azzollini and Martin Sharkey discuss current market trends and legal and regulatory developments that are affecting the CLO market.