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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Credit risk & modelling – Special report 2021

This Risk special report provides an insight on the challenges facing banks in measuring and mitigating credit risk in the current environment, and the strategies they are deploying to adapt to a more stringent regulatory approach.

The wild world of credit models

The Covid-19 pandemic has induced a kind of schizophrenia in loan-loss models. When the pandemic hit, banks overprovisioned for credit losses on the assumption that the economy would head south. But when government stimulus packages put wads of cash in…

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