A Red-Hot Corner of Wall Street Catapults Toward $1 Trillion Mark
- Credit-grading firms are overwhelmed with CLOs to rate
- Gridlock may get worse with Covid-era deals looking to retool
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Wall Street is packaging leveraged loans into bonds at a record pace, stretching bankers, lawyers and debt graders to the limit while showing no signs of slowing.
Money managers that bundle and sell collateralized loan obligations are finding they have to make reservations with bond-rating firms months in advance to get a deal graded. Lawyers say they’re pulling all-nighters to keep up with the flood of documents needed to offer the securities to investors. And firms that arrange or buy the deals are trying to bolster their thinly-stretched staffs, creating a bidding war for talent amid an already limited pool of specialists.