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Pre-pandemic trends persist for US CLOs

Category: ABS Capital Relief Trades CLOs

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Pre-pandemic trends persist for US CLOs
Pre-pandemic trends in US leveraged lending - including high leverage, weak covenants and declining recoveries - resumed by 3Q20 and should continue into 2021, absent a renewed downturn, according to Moody’s. Consequently, the agency expects that in 2021 US CLOs will include structural features for maintaining loan workout and trading flexibility to help manage assets under stress.

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