Potential loan repricing puts key CLO metric at risk

quantity vs quality 230px
By Paola Aurisicchio
27 Jan 2020

CLOs failing a crucial quality test as the market faces a potential wave of leveraged loan refinancings, said analysts at JP Morgan in a report published this week.

With attractively low interest rates bringing many leveraged loan borrowers back to market to refinance or reprice their loans, the weighted average spreads (WAS) on CLOs are coming under pressure. According to JP Morgan CLO researchers, about 60% of loans are trading at or above par. That is ...

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