,,ib  ,union ,cal5d> ,no4 #dfb  #aad?   
,,congress  #b;d ,session  ,h4 ,r4 #daff
  ,report ,no4 #aad-eif  ,,9 ,,! ,,h\se 
,,( ,,repres5tatives  ,decemb] #c1 #bjae
 ,mr4 ,b>r 7= himself & ,mr4 ,david     
,scott ( ,georgia7 introduc$ ! foll[+   
bill2 :i* 0 ref]r$ to ! ,committee on   
,f9ancial ,s]vices  ,may #bf1 #bjaf     
,additional sponsors3 ,mr4 ,fo/]1 ,mr4  
,gu9ta1 ,mr4 ,huiz5ga ( ,mi*igan1 ,mrs4 
,wagn]1 ,mr4 ,m>*ant1 ,mr4 ,/iv]s1 ,mr4 
,mc,henry1 ,mr4 ,fitzpatrick1 ,mr4      
,luetkemey]1 ,mr4 ,c>ney1 & ,mr4 ,hill  
,may #bf1 #bjaf ,report$ ) an am5dm5t1  
committ$ to ! ,committee ( ! ,:ole ,h\se
 on ! ,/ate ( ! ,union1 & ord]$ to be   
pr9t$ ,/rike out all aft] ! enact+      
clause & ins]t ! "p pr9t$ 9 italic ,=   
text ( introduc$ bill1 see copy ( bill z
 introduc$ on ,decemb] #c1 #bjae  ,a    
,,bill  ,to am5d ! ,securities ,ex*ange 
,act ( #aicd to provide specific cr$it  
risk ret5tion requirem5ts to c]ta9      
qualify+ collat]aliz$ loan obligations4 
#a4 ,%ort title ,?is ,act may be cit$ z 

! ,exp&+ ,prov5 ,f9anc+ = ,am]ican      
,employ]s ,act4  #b4 ,risk ret5tion     
requirem5t = qualifi$ collat]aliz$ loan 
obligations ,section #ae;,g7e7 ( !      
,securities ,ex*ange ,act ( #aicd 7#ae  
,u4,s4,c4 #ghj-aa7;e77 is am5d$ by      
ins]t+ aft] p>agraph 7#f7 ! foll[+ new  
p>agraphs3  7#g7 ,requirem5ts = qualifi$
 collat]aliz$ loan obligations  7,a7    
,risk ret5tion requirem5t ,not)/&+ any  
o!r provision ( ?is section1 z ( !      
effective date set =? 9 subsection      
7i77#b71 ! risk ret5tion requirem5t =   
qualifi$ collat]aliz$ loan obligations  
may be met by ! pur*ase &1 dur+ !       
applicable duration ( risk ret5tion     
specifi$ by ! rules ( ! ,f$]al bank+    
ag5cies "u subsection 7c77#a77;,c77ii71 
hold+ 7)\t h$g+ or o!rwise transf]r+ !  
cr$it risk71 ( ! value ( no less ?an    
five p]c5t ( ! equity di/ribut$ among   
ea* ( ! high] tran*es ( ! issuance ) no 
less ?an #c4e p]c5t reta9$ z equity ( ! 
collat]aliz$ loan obligation by ! manag]
 ( ! qualifi$ collat]aliz$ loan         

obligation or "o or m ( ! majority-own$ 
affiliates ( ! manag] or its kn[l$geable
 employees & o!r employees4  7,b7       
,qualifi$ collat]aliz$ loan obligations 
,= purposes ( ?is p>agraph1 a qualifi$  
collat]aliz$ loan obligation is a       
collat]aliz$ loan obligation t meets all
 ( ! foll[+ requirem5ts3  7i7 ,asset    
quality protections ,! collat]aliz$ loan
 obligation %all-- 7,i7 h at lea/ #ajj  
p]c5t ( its assets compris$ ( s5ior     
secur$ loans & ca% equival5ts2  7,,ii7 h
 #ajj p]c5t ( its loan assets issu$ by  
companies2  7,,iii7 h no assets t are   
asset-back$ securities or d]ivatives1   
except t ?is limitation %all n prohibit 
a qualifi$ collat]aliz$ loan obligation 
f acquir+ a loan p>ticipation or any    
int]e/ relat$ to or 9 a lett] ( cr$it1  
or ent]+ into d]ivative transactions to 
h$ge int]e/ rate or curr5cy rate        
mismat*es2  7,,iv7 n pur*ase assets 9   
default1 m>g9 /ock1 or equity conv]tible
 securities2  7,v7 acquire only loans   
held or acquir$ by ?ree or m inve/ors or

 l5d]s unaffiliat$ ) ! manag]2  7,,vi7  
hold only loans to borr[]s ^: f9ancial  
/atem5ts are subject to an annual audit 
f an indep5d5t1 accr$it$ acc\nt+ firm2  
7,,vii7 h no m ?an #fj p]c5t ( its      
assets compris$ ( cov5ant lite loans1   
except t ea* asset %all require !       
disclosure ( unaudit$ f9ancial /atem5ts 
qu>t]ly )9 #de days ( ! end ( ! qu>t] & 
audit$ f9ancial /atem5ts annually )9 #ij
 days ( ! end ( ! fiscal ye>2 &         
7,,viii7 at ! "t ( pur*ase ( any asset1 
comply ) ! requirem5ts ( subclauses 7,i7
 & 7,,vii7 & clause 7ii7 ( ?is          
subp>agraph1 or1 if n 9 compliance ) any
 su* requirem5t1 ma9ta9 or improve !    
level ( compliance aft] giv+ effect to  
su* pur*ase4  7ii7 ,asset portfolio     
protections  7,i7 ,no m ?an #c4e p]c5t (
 ! assets ( ! collat]aliz$ loan         
obligation may relate to any s+le       
borr[]4  7,,ii7 ,no m ?an #ae p]c5t ( ! 
assets ( ! collat]aliz$ loan obligation 
may relate to any s+le indu/ry4  7iii7  
,/ructural protections  7,i7 ,!         

collat]aliz$ loan obligation's equity   
%all be at lea/ #h p]c5t ( ! value ( its
 assets4  7,,ii7 ,! gov]n+ transaction  
docum5ts ( ! collat]aliz$ loan          
obligation specify ov]-collat]alization 
& int]e/ cov]age te/s1 & if any su* te/ 
falls bel[ ! requir$ level specifi$ = ! 
collat]aliz$ loan obligation 9 su*      
docum5ts1 available int]e/ collections  
7& if necess>y1 available pr9cipal      
collections7 mu/ be appli$ to repay !   
collat]aliz$ loan obligation's debt 9   
ord] ( s5iority until compliance ) !    
applicable te/ is re/or$4  7iv7         
,requirem5t to ma9ta9 alignm5t ( manag] 
& inve/or int]e/s  7,i7 ,! collat]aliz$ 
loan obligation %all be an op5 m>ket    
collat]aliz$ loan obligation4  7,,ii7 ,!
 hold]s ( ! equity ( ! collat]aliz$ loan
 obligation 7exclud+ ! risk ret5tion    
equity held z requir$ by subp>agraph    
7,a77 %all h ! "r to remove by vote !   
manag] = cause4  7,,iii7 ,a majority ( !
 manag]'s fees1 includ+ any inc5tive    
fee1 %all be subord9at$ to paym5ts !n   

due 9 relation to ! collat]aliz$ loan   
obligation's debt securities4  7,,iv7 ,!
 manag]'s discretion>y sales ( assets on
 behalf ( ! issu] ( ! collat]aliz$ loan 
obligation %all be limit$ ea* ye> to n m
 ?an #cj p]c5t ( ! pr9cipal am\nt ( !   
assets ( ! collat]aliz$ loan obligation 
7o!r ?an sales ( default$ or            
cr$it-det]iorat$1 cr$it-risk1 or        
cr$it-improv$ loans74  7,v7 ,! risk     
ret5tion equity requirem5t set =? 9     
subp>agraph 7,a7 is met4  7,,vi7 ,all   
hold]s ( collat]aliz$ loan obligation   
securities t are ,u4,s4 p]sons )9 !     
mean+ ( ,regulation ,s 7#ag ,c4,f4,r4   
#bcj2 #bdi7 "u ! ,securities ,act (     
#aicc1 are qualifi$ inve/ors4  7v7      
,regulatory ov]sight requirem5ts  7,i7  
,! manag] ( ! collat]aliz$ loan         
obligation %all be regi/]$ ) !          
,commission z an inve/m5t advis] "u     
section #bjc ( ! ,inve/m5t ,advis]s ,act
 ( #aidj 7#ae ,u4,s4,c4 #hj;b-#c74      
7,,ii7 ,all pur*ases & sales ( ! assets 
( ! collat]aliz$ loan obligation %all be

 conduct$ on an arm's-l5g? basis & 9    
compliance ) any applicable provisions (
 ! ,inve/m5t ,advis]s ,act ( #aidj4     
7vi7 ,requirem5ts relat+ to transp>5cy &
 disclosure ,a mon?ly report %all be    
made available to hold]s ( debt         
securities ( ! collat]aliz$ loan        
obligation1 :i* includes in=mation      
reg>d+--  7,i7 a li/ ( assets ( !       
collat]aliz$ loan obligation1 includ+1 )
 respect to ea* asset1 ! obligor "n2 !  
,,cusip 7or security id5tifi]7 if       
applicable1 ! int]e/ rate & maturity    
date1 ! type ( asset1 & ! m>ket price = 
ea* asset :]e available2  7,,ii7 )      
respect to ! portfolio ( assets1 !      
aggregate pr9cipal balance & aggregate  
adju/$ collat]al pr9cipal am\nt 7adju/$ 
z requir$ by ! collat]aliz$ loan        
obligation gov]n+ transaction docum5ts7 
& ! p]c5tage ( su* aggregate adju/$     
collat]al pr9cipal repres5t$ by ea*     
asset2  7,,iii7 in=mation relat+ to ea* 
applicable ov]-collat]alization te/ &   
int]e/ cov]age te/ & ! level (          

compliance 9 relation to ea* te/2       
7,,iv7 all pur*ases1 repaym5ts1 & sales 
( assets2 &  7,v7 ! id5tity ( ea*       
default$ asset z def9$ 9 ! relat$       
transaction docum5ts4  7#h7 ,def9itions 
= purposes ( p>agraph 7#g7 ,= purposes (
 p>agraph 7#g71 ! foll[+ def9itions     
apply3  7,a7 ,balance %eet collat]aliz$ 
loan obligation ,! t]m balance %eet     
collat]aliz$ loan obligation means a    
collat]aliz$ loan obligation-- 7i7 ^:   
assets consi/ pr$om9antly ( loans       
orig9at$ & transf]r$ to ! collat]aliz$  
loan obligation by "o or m ( its        
affiliates o!r ?an 9--  7,i7 op5 m>ket  
transactions2  7,,ii7 f an op5 m>ket    
collat]aliz$ loan obligation2 or        
7,,iii7 f a collat]aliz$ loan obligation
 9 exi/5ce z ( ! effective date ( ?is   
p>agraph t is n a balance %eet          
collat]aliz$ loan obligation2 &  7ii7 ! 
assets & liabilities ( :i* are1         
imm$iately aft] issuance ( its          
asset-back$ securities 9 a              
securitization transaction1 includ$ "u  

g5]ally accept$ acc\nt+ pr9ciples 9 !   
consolidat$ balance %eet ( "o or m ( its
 affiliates4  7,b7 ,collat]aliz$ loan   
obligation ,! t]m collat]aliz$ loan     
obligation means any issu+ entity ( an  
asset-back$ security1 z def9$ 9 section 
#c7;a77#gi7 ( ! ,securities ,ex*ange    
,act ( #aicd 7#ae ,u4,s4,c4             
#gh;c7a77#gi771 t is compris$ prim>ily (
 comm]cial loans4  7,c7 ,cov5ant lite   
loan ,! t]m cov5ant lite loan means1 at 
! "t ! collat]aliz$ loan obligation     
ent]s into a commitm5t to acquire su*   
loan1 a loan = :i* ! und]ly+ in/rum5ts  
nei!r--  7i7 require ! obligor to comply
 ) any ma9t5ance cov5ant2 nor  7ii7     
conta9 a cross-default provision to a   
f9anc+ facility ( ! obligor t requires !
 obligor to comply ) a ma9t5ance cov5ant
 7includ+ "o t may apply only ^u ! fund+
 ( su* o!r loan or f9anc+ facility72    
except t if su* loan is p>i passu )     
ano!r loan ( ! obligor t w\ld n be a    
cov5ant lite loan "u ! crit]ia 9 ?is    
clause1 su* loan %all be deem$ n to be a

 cov5ant lite loan4 ,= purposes ( ?is   
clause1 ! t]m p>i passu means treat$    
equally & )\t pref]5ce4  7,d7 ,equity ,!
 t]m equity means ! mo/ junior class (  
securities issu$ by ! collat]aliz$ loan 
obligation 7exclud+ any non-economic    
security su* z ! issu]'s common /ock7 & 
any additional class7es7 ( securities   
junior to ! collat]aliz$ loan           
obligation's debt securities4  7,e7     
,manag] ,! t]m manag] means an inve/m5t 
manag] t is responsible = manag+ a      
collat]aliz$ loan obligation "u !       
collat]aliz$ loan obligation's gov]n+   
transaction docum5ts4  7,f7 ,op5 m>ket  
collat]aliz$ loan obligation ,! t]m op5 
m>ket collat]aliz$ loan obligation means
 a collat]aliz$ loan obligation-- 7i7 ^:
 assets consi/ pr$om9antly ( s5ior1     
secur$ syndicat$ loans acquir$ by su*   
collat]aliz$ loan obligation directly f 
! sell]s !re( 9 an op5 m>ket transaction
 or f ano!r collat]aliz$ loan obligation
 & ( tempor>y inve/m5ts2  7ii7 t is     
manag$ by a manag]2 &  7iii7 t is n a   

balance %eet collat]aliz$ loan          
obligation4  7,g7 ,op5 m>ket transaction
 ,! t]m op5 m>ket transaction means--   
7i7 ei!r an initial loan syndication    
transaction or a second>y m>ket         
transaction 9 :i* a sell] (f]s s5ior1   
secur$ syndicat$ loans to prospective   
pur*as]s 9 ! loan m>ket on m>ket t]ms on
 an arm's l5g? basis1 :i* prospective   
pur*as]s include1 b are n limit$ to1    
entities t are n affiliat$ ) ! sell]2 or
  7ii7 a rev]se inquiry f a prospective 
pur*as] ( a s5ior1 secur$ syndicat$ loan
 ?r\gh a deal] 9 ! loan m>ket to pur*ase
 a s5ior1 secur$ syndicat$ loan to be   
s\rc$ by ! deal] 9 ! loan m>ket4  7,h7  
,qualifi$ inve/or ,! t]m qualifi$       
inve/or means--  7i7 ) respect to       
securities t require ! paym5t ( pr9cipal
 & int]e/1 an inve/or t is a qualifi$   
pur*as]1 )9 ! mean+ ( section #c7;c77#g7
 ( ! ,inve/m5t ,company ,act ( #aidj    
7#ae ,u4,s4,c4 #hj;a-#c7;c77#g77 or an  
entity own$ exclusively by "o or m      
qualifi$ pur*as]s2 or  7ii7 ) respect to

 securities t d n require ! paym5t (    
pr9cipal & int]e/--  7,i7 if ! qualifi$ 
collat]aliz$ loan obligation relies on  
su* section = its exclusion f !         
def9ition ( inve/m5t company "u !       
,inve/m5t ,company ,act ( #aidj-- 7aa7 a
 qualifi$ pur*as]2  7bb7 a kn[l$geable  
employee1 )9 ! mean+ ( ,rule #c;c-#e    
promulgat$ "u ! ,inve/m5t ,company ,act 
( #aidj2 or  7cc7 an entity own$        
exclusively by su* a qualifi$ pur*as] or
 kn[l$geable employee2 or  7,,ii7 if !  
qualifi$ collat]aliz$ loan obligation   
relies on ,rule #c;a-#g promulgat$ "u ! 
,inve/m5t ,company ,act ( #aidj = its   
exclusion f ! def9ition ( inve/m5t      
company "u t ,act & su* securities are n
 fix$-income securities1 z def9$ 9 su*  
rule-- 7aa7 a qualifi$ in/itutional     
buy]1 )9 ! mean+ ( ,rule #add;,a "u !   
,securities ,act ( #aicc2  7bb7 a p]son 
7o!r ?an any rat+ organization rat+ !   
issu]'s securities7 involv$ 9 !         
organization or op]ation ( ! issu] or an
 affiliate ( su* a p]son1 z def9$ 9     

,rule #dje "u ! ,securities ,act (      
#aicc2 or  7cc7 any entity 9 :i* all ( !
 equity own]s are su* qualifi$          
in/itutional buy]s z describ$ 9 item    
7aa7 or p]sons describ$ 9 item 7bb74  4 
,may #bf1 #bjaf ,report$ ) an am5dm5t1  
committ$ to ! ,committee ( ! ,:ole ,h\se
 on ! ,/ate ( ! ,union1 & ord]$ to be   
pr9t$