Relatórios e análises
By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience.
Leveraged loans,” extended to junk-rated and highly leveraged companies, are too risky for banks to keep on their books. Banks sell them to loan mutual funds, or they slice-and-dice them into structured Collateralized Loan Obligations (CLOs) and sell them to institutional investors. This way, the banks get the rich fees but slough off the risk to investors, such as asset managers and pension funds.
Also this week, New York Life is selling the top-rated tranche of a CLO at a spread of less than 100 bases over Libor. And Palmer Square Asset Management sold a $510-million CLO at a similar premium over Libor. In the secondary markets, where the CLOs are trading, red-hot demand has already pushed spreads below 100 basis points. These are the lowest risk premiums over Libor since the Financial Crisis.