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CLOs

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  • Hedge funds are trading synthetic mezzanine classes of Swiss and German small- and medium-sized enterprise collateralized loan obligations, according to sister publication Derivatives Intelligence.
  • The sale of $8.7 billion in legacy U.S. residential mortgage-backed securities by Lloyds Banking Group has been pushed back two days to Thursday, probably to give potential buyers more time to digest the bid list—the biggest such offering in more than three years—given the shortened holiday week in both the U.S. and U.K.
  • The latest draft of the European Banking Association’s technical implementation of 5% risk retention rules could deal a serious blow to the European collateralized loan obligation market because it specifically cites investment firms as needing to keep “skin-in-the-game”, according to Deutsche Bank asset-backed securities analysts.
  • Some European collateralised loan obligations in the market are having a tough time selling their triple-A senior piece.
  • The latest draft of the European Banking Association’s technical implementation of 5% risk retention rules could deal a serious blow to the European CLO market because it specifically cites investment firms as needing to keep “skin-in-the-game”, according to Deutsche Bank ABS analysts.
  • Some European collateralized loan obligations in the market are having a tough time selling their triple A senior piece.
  • Alternative investment manager Angelo, Gordon & Co. is tapping Morgan Stanley again to arrange its upcoming collateralized loan obligation.
  • A lack of eligible CLO collateral in Europe will force managers to consider multi-currency buckets, but CLO lawyers are less certain whether managers will want to use currency swaps to make multi-currency asset purchases possible.
  • New collateralised loan obligations (CLOs) in the European market will need underlying portfolios that are well ramped up in order to have a smooth ride through the market, according to CLO specialists in London.