The hard sell

Covenant-Lites

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The boom in covenant-lite (cov-lite) loans is starting to have a noticeable effect on collateralised loan obligation (CLO) portfolios. With cov-lite loan volumes exploding in the first quarter of this year, CLO managers are increasingly turning to these assets to use as collateral in their portfolios.

Cov-lite loan volumes reached $48 billion in the first quarter of 2007 - double the figure for the whole of 2006, according to Standard & Poor's Leveraged Commentary and Data. While only a small

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