Fund managers keen to restart the lucrative CLO-making machine are having to stretch the bounds of what counts as collateral behind these deals. As their name suggests, collateralised loan obligations (CLOs) are designed to bundle up leveraged loans, a type of debt that typically gives holders the first claim in a default. Increasingly, though, CLOs are turning to another type of debt - junk bonds - for the security packages that underpin the investment vehicles that are sold to insurers and pension funds.

http://klse.i3investor.com/web/blog/detail/kianweiaritcles/2023-09-20-story-h-239213697-CLOs_desperate_for_collateral_are_loading_up_on_junk_bonds

#i3investor