Had an intro call this week with one of the top 10 CLO Managers in this list (not Arbor).
Despite their data looking pretty clean, they mentioned there will be a lot deals coming to a fork in the road in the next 6 months.
I keep saying this over and over, but the delinquency,… t.co/yTNwQRpkCP
— CleanTo2ndLien (@CleanTo2ndLien) July 18, 2024
I spoke with a sponsor last week that was under contract on a GVA asset via the lender.
DD was a mess. Exactly what you said, deferred maintenance + environmental issues. Lender was unaware. Deal fell apart.
— CleanTo2ndLien (@CleanTo2ndLien) July 18, 2024
#recession … #GFC2 US #CRE edition #CommercialRealEstate #REIT $BX 📉 👀 t.co/gTDQeLkVp1 pic.twitter.com/4BwPdPJMTb
— Invariant Perspective (@InvariantPersp1) July 18, 2024
Banks continue to sell off in a rotational way.
All the banks earnings have not been good and guidance has been even worst. pic.twitter.com/KDp8sYGX0C
— The Coastal Journal (@1CoastalJournal) July 18, 2024
A Collateralized Loan Obligation (CLO) is a type of structured financial product that pools together a collection of loans, typically corporate loans, and then repackages them into different tranches to be sold to investors. Here’s a breakdown of how it works:
- Loan Pooling: A variety of loans, often leveraged loans given to companies with lower credit ratings, are gathered into a single pool.
- Tranching: This pool is then divided into different tranches, or slices, each with varying levels of risk and return. The senior tranches are considered safer and have priority in receiving payments, while the junior tranches are riskier but offer higher potential returns.
- Interest and Principal Payments: Investors in the different tranches receive interest and principal payments based on the performance of the underlying loans. Senior tranche investors get paid first, and junior tranche investors get paid after them.