CLO Investments: Navigating Tax Challenges in a Resurging Market

Balancing Between Debt and Equity Tranches; Applying FATCA, PFIC, CFC and NII Regulations; Handling Acquisition Indebtedness

Recording of a 90-minute premium CLE/CPE webinar with Q&A

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Conducted on Wednesday, November 5, 2014

Recorded event now available

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Course Materials

This CLE/CPE course will provide tax counsel and advisors with legal strategies to handle tax issues involved in collateralized loan obligations (CLOs). The panel will offer their insights and perspectives on the differences between debt and equity tranches, application of new FATCA and PFIC regulations, acquisition indebtedness, and more.


CLOs are experiencing a boom recently and are becoming more and more attractive to investors. There are approximately $300 billion worth of CLOs on the market today. Tax counsel and advisors confront a myriad of complex tax issues in structuring CLOs.

Of most immediate concern is the application of recent FATCA and PFIC regulations to CLOs. Tax counsel and advisors need to overcome the difficulty of getting a preexisting CLO in compliance with FATCA. Advisors and counsel must navigate new reporting requirements for CLOs that are considered PFICs.

In addition to new requirements, counsel must be proficient at differentiating between debt and equity tranches of CLO investments. NII issues affect transactions as well and present additional hurdles for counsel and advisors to overcome.

Listen as our experienced panel reviews complex tax issues facing CLOs including new PFIC and FATCA regulations, differentiating of debt from equity tranches, and the utilization of blocker entities, application of the NII tax, and more.



  1. Tax differences between debt and equity tranches
  2. PFIC and CFC regulations
  3. FATCA regulations
  4. Acquisition indebtedness
  5. Application of NII
  6. Blocker entities


The panel will review these and other key issues:

  • What are the new requirements for FATCA and PFIC compliance? How must counsel best overcome special hurdles for existing CLOs?
  • How does the Net Investment Income tax apply to CLOs? What planning strategies must be implemented?
  • What are the differences between debt and equity tranches? What considerations must be made in structuring investments in CLOs?


Eschi Rahimi-Laridjani
Eschi Rahimi-Laridjani

Special Counsel
Milbank Tweed Hadley & McCloy

Ms. Rahimi-Laridjani’s practice focuses on the taxation of complex financing transactions, financial products and...  |  Read More

Jonathan Stein
Jonathan Stein

Pryor Cashman

Mr. Stein advises on corporate, partnership, and international tax issues. He has represented buyers and sellers in...  |  Read More

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