CLO scare: could rated tranches see losses?

The structures are more solid, but the loans are dicier, and recovery rates may be disintegrating

Risk 1218 lead story AAA Stephen Lee NB illustration
Stephen Lee,

As the credit cycle nears its peak, alarms about complex structured products ring louder. Rating agencies, politicians and economists have called attention to the market for collateralised loan obligations (CLOs), which has more than doubled since 2013 to reach nearly $600 billion in the US as the dubious leveraged loans that feed it have passed $1 trillion.

US banks and insurers hold nearly $150 billion of CLO notes, one-quarter of the total amount outstanding.

So, could CLOs be the next

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to View our subscription options

Most read articles loading...

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here