US CLO overlap is more than one-third, says Moody's
Moody’s points out the high degree of overlap between CLOs, with many owning the same loans
This shouldn't be a surprise to most CLO investors who read the monthly trustee reports or looked at sample portfolios before investing. The only way a CLO manager could get collateral back in the heyday was to place large positions. Managers who placed small orders would often get bagled and if they really wanted the paper had to buy it at above par from a hedge fund that was flipping.
It's great they made this comment now in late 2009 after investors have experienced downgrades and losses.
CLOs
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Comment by: Anonymous. Posted 14 years ago [2009-09-09 13:01:33]