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Tax Reform Complicates Middle-Market CLOs

Law360 (March 9, 2018, 12:57 PM EST) -- The recently enacted Tax Cuts and Jobs Act is causing concerns for advisers of middle-market collateralized loan obligation issuers, or MM CLOs, that are engaged in a U.S. trade or business for U.S. tax purposes.[1]  The TCJA includes Section 1446(f) of the Internal Revenue Code,[2] which potentially imposes a withholding requirement on any purchaser of noninvestment-grade notes issued by an MM CLO, or an entity-level tax on the MM CLO itself, unless the seller of the notes furnishes the purchaser with a “nonforeign affidavit” containing the...
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