Burst of CLO Refinancings Expected Ahead of Libor’s End
- Refinancing and reset CLO deal volume nears $100 billion
- Confusion on replacement benchmark may cause volatility: BofA
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Managers of U.S. collateralized loan obligations may look to jam in more refinancings and related transactions by the end of this year, before the CLO and loan markets start switching to different benchmarks and potentially turn chaotic.
A lack of consensus regarding the eventual replacement for the London interbank offered rate could cause turbulence for CLOs in the fourth quarter, according Bank of America Corp. The benchmark is widely used across the sector and set to go away by June 2023 at the latest.