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This Complex Credit Market Found a Way to Keep Deals Alive Forever

  • Resets satisfy investor demand, avoid chase for scarce loans
  • CLO can be reset multiple times to cut risk and lower cost
Stocks prices displayed on an electronic board at the Asia Plus Securities Pcl headquarters are photographed with a zoom effect in Bangkok, Thailand, on Thursday, May 8, 2014. The baht fell to a one-month low and stocks slumped on concern global investors will shun Thailand after a court ruling to remove Yingluck Shinawatra as prime minister worsened the nation's political crisis.

Photographer: Dario Pignatelli/Bloomberg

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Taking advantage of good times in global credit markets, collateralized loan obligations have evolved to make old deals new again.

Resets, which give years of new life to CLOs that are about to expire, burst forth this year to help set record activity in the CLO market, according to data compiled by Bloomberg. More than $60 billion of resets have priced in 2017, compared to about $22 billion last year, and almost nothing in years past.