Analysts warn investors on pre-crisis style CLO leverage

By Matthew Scully
20 Jun 2014

Market analysts are warning investors to exercise caution as leverage continues to drive the booming market for collateralized loan obligations, which have surpassed last year’s deal flow volume by almost 40%.


Mezzanine CLO investors should take into stronger consideration managers for deals they invest in, as the market moves into the next leveraged phase of the credit cycle, with volatility risk increasing the chance of larger sell-offs, according to Wells Fargo analysts David Preston and Jason McNeilis.

“While the ...

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