Moody’s Investors Service said it may cut the ratings on $22 billion of U.S. collateralized loan obligations -- a fifth of all such bonds it grades -- after the Covid-19 pandemic eroded the financial standing of American companies backed by the securities.
The ratings firm took the action on 859 bonds from 358 CLOs that package leveraged loans into securities of varying degrees of risk and return, according to a statement late Friday. The step -- which affects about 19% of Moody’s-rated CLOs that purchase broadly syndicated loans -- comes as the underlying debt gets downgraded at a record pace.
