Cov-lite caps on rise in burgeoning Euro CLOs

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By Tom Porter
24 Apr 2014

Restrictions on covenant-lite loan buckets have become commonplace in European CLOs this year amid a trend of increasing deal sizes, with issuance expected to surpass half of last year’s total within weeks.

Of the 21 European CLOs priced in 2013, only nine carried restrictions on the proportion of cov-lite loans allowed in the portfolio, according to Bank of America Merrill Lynch data. By contrast, all of the first five European CLOs priced this year capped cov-lite buckets at between 20% ...

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