Collateralised Loan Obligations

CLOs are effectively investment instruments that are backed by a pool of leveraged corporate loans split into tranches, with different risk appetite. These instruments offer investors regular debt payments and diversification in their portfolio.

Early 2022, the European Union (EU) added Cayman to its AML blacklist and the EU securitisation regulation prohibits the establishment of securitisation special purpose vehicles in countries listed on the EU AML blacklist. While the EU securitisation regulation does not explicitly reference investors, the widely-held assertion is that the requirement to ensure that special purpose vehicles (SPV) are not established in a ‘high risk country’ for AML purposes, is also the investor’s obligation.

Jersey is a tried and tested jurisdiction for securitisation structures and this, together with its strong credentials in compliance with international standards, offers the much-needed certainty to CLO issuers and their investors.

For all securitisation SPVs that want to ensure continued access to EU investors for their securitisation transactions, Jersey offers the expertise to help. Whether it is a new deal or a pre-existing one, a move to Jersey is made easy by our expert professional service providers and advisers.