Loss mitigation loans make their way into euro CLOs

money_adobe
By Tom Brown
21 Oct 2020

A common feature of the US CLO market known as the loss mitigation loan has begun to make its way into European deals for the first time, continuing the trend of European managers borrowing features from US peers to deal with the effects of the Covid-19 crisis.

Loss mitigation loans allow a manager to participate in the workout package of existing obligors by relaxing their lending criteria, as long as the manager is lending to an existing borrower in the collateral pool.

The manager can offer loans to the distressed borrower to aid the ...

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