Distress in CRE CLO Loans Jumps Back Up to Record: Credit Weekly

Americans stuck at home during the pandemic chased easy money in all kinds of places: meme stocks, crypto, and even apartment complexes.

Now, some of those real estate bets are coming back to haunt them, and Wall Street is also on the hook. Debts that helped fund the investments were bundled into an obscure type of collateralized loan obligation. Distress rates on those commercial real estate loans climbed to 8.6% in April, matching a record set in January, according to data compiled by CRED iQ.

The loans bundled into CRE CLOs were combined with money from retail investors to ...