High demand for euro CLO collateral fuels US loan recycling
The amount of exposure to US loan collateral in European CLOs has climbed to as high as 30% for some newly issued deals, as newer managers “recycle” US collateral into euro transactions.
US collateral in European deals – either denominated in euros or dollars -- are included to add diversity to a CLO, in addition to potentially offering better relative value than European leveraged loans. But by increasing the amount of US collateral in European CLOs, managers typically will be
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