Finance

What are Collateralized Loan Obligations (CLO)?

What are Collateralized Loan Obligations (CLO)?

A collateralized loan obligation (CLO) is a single security backed by a pool of debt. CLOs are often corporate loans with low credit ratings or loans taken out by private equity firms to conduct leveraged buyouts.

What is the purpose of CLO?

What is a CLO? A CLO is a special purpose vehicle (SPV) that acquires a portfolio of diversified syndicated leveraged loans through the private placement of rated debt and equity securities, providing investors with differentiating risk and reward profiles.

What does CLO stand for?

A chief learning officer (CLO) is a senior-level executive who ensures that a company’s corporate learning program and strategy supports its overall business goals. CLOs are often found at larger organizations where the human resources department is broken out into various specialties.

What is CLO and CDO?

The primary difference between CLO vs CDO is with the underlying assets backing them. CLO uses corporate loans, while CDO mostly uses mortgages. To get a better understanding of the two terms and their usage, we should understand the difference between CLO vs CDO.

What is an example of a collateralized loan?

A home mortgage and a car loan are two common examples of collateralization. The house or the car may be seized by the lender if the borrower defaults on the payments. Collateralization is common for business loans.

What are the duties and responsibilities of a community liaison officer?

Develops, plans, and/or coordinates various system-wide district activities (e.g. community outreach, media/public relations functions, etc.) for the purpose of enhancing district/community relationships, improving customer services/programs, and promoting a positive public image.

Is a CLO an asset backed security?

A type of asset-backed security (ABS) in which the securitized asset pool is composed of highly leveraged corporate loans (other than mortgages), usually related to M&A transactions such as LBOs or other types of acquisition financings.

Are CLO derivatives?

Both CLOs and CMOs are examples of credit derivatives.

What are collateralized transactions?

A collateral transaction requires some type of asset to be provided by a borrower to a lender, usually in exchange for a loan. If the person borrowing the funds does not repay based on the terms of the agreement, the lender can seize the item given as collateral.

Why are most of loans collateralized?

Collateral is an item of value used to secure a loan. Collateral minimizes the risk for lenders. If a borrower defaults on the loan, the lender can seize the collateral and sell it to recoup its losses. Mortgages and car loans are two types of collateralized loans.

What is a community liaison in healthcare?

The Community Liaison’s role will include working with hospitals, skilled nursing facilities, assisted living facilities, and other providers in the senior care industry. They will need to identify, develop, and maintain referral sources.

Who owns CLO debt?

We estimate that U.S. investors held an additional $147 billion of domestically-issued U.S. CLOs, for a total of $556 billion held by U.S. investors, or 90% of total U.S. CLOs outstanding.

Table 1: CLO Investors by Tranche.
AAA Notes Mezzanine Notes Equity
U.S. Regional Banks CLOs CLO Managers
U.S. Investment Banks

3 more rows

Jul 19, 2019

What is a CLO equity fund?

A collateralized loan obligation, or CLO, is a special purpose vehicle that invests in a pool of broadly syndicated or middle market senior secured loans covering a diverse range of issuers and industries.

Who is the issuer of a CLO?

CLOs are issued and managed by asset managers. Of the approximately 175 CLO managers6 with post-crisis deals under management worldwide, PineBridge has found about two-thirds are in the US and the remaining third are in Europe.

What does securitization mean in finance?

Securitization is the process in which certain types of assets are pooled so that they can be repackaged into interest-bearing securities. The interest and principal payments from the assets are passed through to the purchasers of the securities.

What is a collateralized note?

A secured note is form of loan or corporate debt that is backed by assets as collateral attached to it. Because it is collateralized, it is a less risky prospect for an investor than an unsecured note, and carries a lower interest rate in turn.

Back to top button