Covenant-lite CLOs: From sub-prime to the ridiculous

The recent disruption in the US sub-prime mortgage market served as a warning to the CDO market of what happens when deals are backed by increasingly risky underlying assets. So why aren’t CLO managers – who are now buying single-B rated, covenant-lite loans in their droves – paying more attention? Louise Bowman reports.

Crunch time for LBOs
Euromoney August 2007
The investor revolt in the
leveraged loan market during
June and July was long
overdue and much needed.
But have the excesses of the
past few years left the LBO
market teetering on the
precipice of a far more serious
credit squeeze?

Why covenant-lite CLOs are the next accident waiting to happen

SOMETIMES THINGS JUST don’t seem quite right. “One good thing about the rapid growth of covenant-lite leveraged loans is that even if things go wrong these loans are not going to fall over for a long time,” mused one CLO manager recently.

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Covenant-lite CLOs: From sub-prime to the ridiculous

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Awards for Excellence country/territory winners 2025: Georgia’s best investment bank – Galt & Taggart

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Covenant-lite CLOs: From sub-prime to the ridiculous

Thanks for your interest in Euromoney!

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Awards for Excellence country/territory winners 2025: Georgia’s best investment bank – Galt & Taggart

Awards for Excellence 2025 winners celebrate in London

Future capital markets infrastructure: Fungible, fractionalised and fused