CLO manager adds novel twist to discount purchase rule

By Mike Peterson

Thursday, October 15, 2009

A 2007 deal managed by a west coast manager has become the latest CLO to change its rules on discount purchases

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Comment by: Douglas Watson. Posted 14 years ago [2009-10-15 18:08:55]

Perhaps the description of this discount amendment is incomplete. Think of a trade where the new loan is rated the same and trades at the same price as the loan replaced, BUT the new loan carries a negative outlook or is on watch for downgrade, sports a higher coupon and matures after the loan replaced. It is hard to believe the senior class holders would like that trade! It was these kind of the-devil-is-in-the-details considerations that killed many of these amendment proposals given natural senior class resistance.

Comment by: Anonymous. Posted 14 years ago [2009-10-15 16:55:55]

As a AAA owner, I would just want my money back, or some compensation. Depending on the performance of the deal, this probably only helps other classes. Why change the rules if they don't help me? when I'm getting paid L+nada?

Comment by: Jonathan Bowers. Posted 14 years ago [2009-10-15 13:32:47]

sounds like a reasonable compromise to me - someone is finally addressing the interests of all parties and not just the AAAs............

Comment by: Anonymous. Posted 14 years ago [2009-10-15 11:35:13]

sounds like a reasonable compromise to me - someone is finally addressing the interests of all parties and not just the junior notes and manager.

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