CLOs on Losing End of Debt Restructurings Finally Get a Say (1)

CLO managers, the biggest investors in leveraged loans, have long taken a backseat role when borrowers get into trouble. That’s starting to change.

In recent months European collateralized loan obligations have played a key part in debt talks for German firm OQ Chemicals, cinema chain Vue and mall operator Intu SGS. It’s all part of efforts to flex their muscles in distressed situations — and stem losses from troubled companies.

The investment vehicles, which typically package loans into bonds of varying risk and reward, have traditionally exercised little influence when it comes to the fate of their borrowers ...