CLO resets needed to build ‘runway’ for downturn

By David Bell
15 Aug 2018

Tom Majewski, chief executive of US CLO equity investment firm Eagle Point, said on Tuesday that the firm was focused on resetting existing CLOs in which it held majority equity positions, in order to improve the arbitrage in the structures and also build “runway” for the company to benefit when the loan market eventually suffers a downturn.

Majewski said that refinancing and resetting old CLOs, particularly deals structured in 2016 when the cost of debt was high, had enabled the firm to cut between 40bp-70bp from the cost of debt, improving cash flow to the equity where the firm focuses its investments.

But aside from ...

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