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CLO Managers Use ‘Print-and-Sprint’ to Profit From Cheap Loans

  • Low leveraged loan prices had created prime deal conditions
  • AAA CLO spreads are spiking wider, making new deals tougher
Updated on

The biggest buyers of leveraged loans are looking to repeat a strategy that generated gains of more than 60% during the early part of the pandemic, but raising money for these funds is getting harder. 

Money managers are quickly buying loans in trading markets and funding their purchases by selling bonds known as collateralized loan obligations. These “print-and-sprint” transactions differ from regular CLOs, where firms buy new loans from companies over months, temporarily funding their purchases with credit lines from banks until they sell CLOs.