Seasoned Aladdin CLO may default, says Moody's

A 2001 CLO managed by Aladdin Capital could be close to triggering an event of default, says Moody’s. The rating agency downgraded the most senior remaining notes in Landmark CDO, the $26 million of class C notes, from Baa2 to Ba1. The rating agency said it was concerned that there might not be enough cash coming into the deal to make the next interest payments on the notes. A failure to make the coupons would be an event of default.

To date there have been only a handful of CLOs that have hit an event of default, unlike in the CDO of ABS space where many deals have suffered this fate. Among the few CLOs that have hit an event of default is another Aladdin deal, Landmark II.