CLO experts fear wave of downgrades over next three years

By Tom Brown
23 Sep 2019

Market players speaking on a panel on day two of ABS East were sounding the alarm on the possibility that a wave of downgrades could hit CLO collateral over the next three years, testing the market’s ability to withstand an influx of triple-C loans.

The risk of 10%-20% of collateral held in CLOs becoming triple-C rated is “a real possibility over the next three years,” said Thomas Majewiski, managing partner and founder at Eagle Point Credit Management.

Several participants noted the growth of the single-B market over the past few years, and ...

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