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July 15, 2024
Cadwalader partners Alexander Collins and Dan Tobias spoke with 9Fin about the current European collateralized loan obligation (CLO) market as part of the publication’s half-year legal league table report, published today.
Alex and Dan shared their observations about one notable trend to date in 2024: Anchor triple-A CLO investors desiring bespoke stipulations for their deals, but that this can present CLO liquidity issues.
“Sometimes you get a triple-A anchor investor that has a certain stipulation that maybeothers wouldn’t need,” Alex noted to 9Fin. “We’ve seen more managers tie particular stips to that investor, a ‘day one class A holder.’ Those stips will apply so long as they hold a majority of the class A notes and to the extent that is no longer the case or the investor isn’t in the deal, those stips can fall away.”
Dan added that sometimes this will mean more restrictions on aspects like workout criteria or consent on modifications and waivers beyond what other investors would typically require.
Read the article here. (subscription required)
