Believe some CLO managers are straining every sinew and doing whatever it takes to avoid breaching the OC tests. In contrast, others might have to come with terms with failing OC tests due to poorer portfolio qualities and the waves of downgrades. A few deals genuinely had their OC tests set too tightly at inception.
Please see the two tables below for the change in the number of deals with failing OC tests over the past two months.
Disclaimers
The information, research, data, research related opinions, observations and estimates contained in this document have been compiled or arrived at by CLO Research Group, based upon sources believed to be reliable and accurate, and in good faith, but in each case without further investigation. None of CLO Research Group or its service providers, their directors or authorised personnel make any expressed or implied presentation or warranty, nor do any of such persons accept any responsibility or liability as to the accuracy, timeliness, completeness or correctness of such sources and of the information, research, data, research related opinions, observations and estimates contained in this document. All information, research, data, research related opinions, observations and estimates contained in this document are in draft form as at the date of this document and remain subject to change and amendment without notice. Neither CLO Research Group nor any of their third-party providers shall be subject to any damages or liability for any errors, omissions, incompleteness or incorrectness of this document. This article is not and should not be construed as an offer, or a solicitation of an offer, to buy or sell securities and shall not be relied upon as a promise or representation regarding the historic or current position or performance of any of the deals or issues mentioned in it.
