CLOs said to seek spread as pipeline compresses arb

By Owen Sanderson
16 Feb 2021

CLO managers bringing new deals need lower rated, higher yielding loans to come to the primary market, after the European market saw a surfeit of better quality supply in the first months of the year.

Strong supply towards the top end of the leveraged finance quality spectrum has led to a structural bid for weaker credits, as CLO managers warehousing new deals seek to balance their portfolios.

CLO structures commit managers to two big constraints — and dozens of smaller ones — weighted ...

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