OC failure highlights growing collateral concerns in CLOs

OC failure highlights growing collateral concerns in CLOs

Sam Kerr

April 26, 2016 07:30 PM

worried traders — Stock traders checks out a graph showing activity of US interest rates over one year in a business bank, in Paris, Monday, Dec. 12, 2011. Enthusiasm for riskier assets such as stocks and the euro faded Monday as investors worried that Europe's new pact aimed at fixing the continent's debt crisis would be insufficient. (AP Photo/Michel Euler) | Michel Euler/AP/Press Association Images

The failure of a 2014 CLO to pass its overcollateralisation (OC) test last week has put the spotlight back on underlying credit quality in US CLOs, even as the market retraces much of the widening in spreads that has taken place in 2016.

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Topics

Securitization LevFin Securitization - CLOs United States LevFin - CLOs

SK

Sam Kerr