CLO Machine Is Approaching Full-Tilt, and Credit Quality Suffers

Wall Street’s hottest debt market is approaching hyperdrive.

Investors haven’t been able to get enough of the repackaged corporate loans known as collateralized loan obligations. That intense demand, is allowing the managers that put these securities together to sell off pieces of CLOs that by law they previously had to hang on to. These sales are the crest of what could be a $7 billion wave of such deals.
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