CLO diversity covenants become ‘best practice’

By Tom Porter
10 Mar 2015

Recently priced European CLOs have had greater portfolio diversity written into their structures thanks to additional covenants, according to Fitch.

The covenants restrict the exposure of a CLO to its largest 10 obligors to 20%, compared to 26.5% for the typical European CLO, and appear to have been included in structures as “market best practice” recently, said Fitch.

A prominent criticism levelled at the European CLO market in ...

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