CLOs rue oil exposure

By Will Caiger-Smith
15 Jan 2015

Of the 68 US loan borrowers that have suffered price drops of more than 5 percentage points in the past 30 days, some 35 are in the oil and gas industry or related sectors, compared to just five two months ago, Morgan Stanley analysts wrote on Wednesday.

Some 565 CLOs have exposure to those 35 distressed issuers, the analysts said. Oil and gas accounts for 4% of portfolios in the CLO market, and is the eighth largest sector in the S&P and Loan Syndications and Trading Association CLO index.

Upstream firms — those involved in ...

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