CLOs tests longer reinvestment periods with mixed reception

Dollar fotolia
By Sam Kerr
21 Feb 2017

As US CLO managers explore ways to boost returns on new deals, longer reinvestment periods could be introduced to appease equity buyers, though debt investors may not accept the trend quietly.

The Carlyle Group released guidance last week on its first new issue CLO of the year, which features a six year reinvestment period. Most deals tend to have about a four or five year window for reinvestment, with some sources saying they were surprised at Carlyle’s decision.

“Deal ...

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