Investors swarm US CLOs despite weaker terms
Looser documentation is emerging in the hot US CLO market, with debt investors in some instances now allowing managers to include terms that permit trading gains to be funnelled straight through to the pockets of equity investors, which is sometimes the CLO manager themselves.
CLO managers have successfully pushed for more equity-friendly terms in new CLO deals in recent weeks, according to sources.One is the clause that a small number of managers have been able to include in deals, that allow “excess par” — gains realised by CLO managers trading loans ...
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