CLOs take centre-stage in leveraged loans market

The FT reported how CLOs are occupying a dominant role in the market for leveraged loans, buying up 50% of them. That buying spree has helped to inflate the CLO market to $600bn (double its size in 2007).

Though historically losses have been impressively-low for higher-trated tranches of CLOs, that could change with the increasing number of cov-lite loans they hold.