Cloud 9fin Tranche Talk — Navigating CLO demand through regulatory changes with PGIM’s Edwin Wilches
Oct 27, 2025
Edwin Wilches, Co-head of Securitized Products at PGIM with over 20 years of experience, shares insights on CLOs and securitization's critical role in Europe's growth. He discusses the implications of Solvency II on demand for AAA tranches and the market's adaptation to recent regulatory changes. Edwin also highlights innovations driven by insurance, the resilience of portfolios during corporate bankruptcies, and the contrasting risks between single-asset CMBS and diversified securitization. Stay informed about relative value opportunities across the CLO capital stack!
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Securitization Is Central To Europe’s Growth
- Europe lags peers because financing is bank-centric and securitization is underused as a growth engine.
- Increasing securitization could channel household savings into productive investment and close Europe’s growth gap.
Cut Friction To Unlock Investor Demand
- Reduce redundant rules and friction for asset managers to unlock investor participation in securitization.
- Focus regulation on enabling growth while maintaining financial stability to widen investor pools.
Solvency II Helps AAA But Takes Time
- Solvency II proposals aim to improve capital treatment for AAA CLOs but leave lower tranches less helped.
- Better AAA treatment may boost market growth, but full implementation will take years and iterative work.