Who are the participants?
- The issuer of a CLO is a special purpose vehicle, a company with no real staff or substance.
- The arranger is an investment bank that creates the CLO and sells its equity and notes to investors.
- A CLO’s governing contract (the indenture) consists of an agreement between the issuer and the trustee. The trustee is a bank whose role is to represent the CLO noteholders.
- Almost all CLOs have notes that are rated by a rating agency. The rating agencies play an integral role in the life of a CLO.
Turn to the print version of the CLO guide to find out:
- How bankruptcy remoteness works
- What are typical fees paid to CLO arrangers, trustees, law firms and rating agencies?
- Who are the most active CLO arrangers?
- Which investors typically buy which tranches of a CLO?
- What is a control equity investor, which firms are active as control equity investors, and which are some of the CLOs they control?
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