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CLO Bankers May Lose Out If This Startup Has Its Way

Feb. 10, 2020, 11:00 AM

A startup conducted an online auction recently that could revolutionize the way the biggest buyers of leveraged loans fund themselves.

The auction allowed a loan buyer known as a collateralized loan obligation to cheaply refinance the securities it had issued to fund its investments. The CLO saved hundreds of thousands of dollars in fees, compared with a more standard refinancing through a Wall Street bank.

The firm that organized the auction, Los Angeles-based KopenTech, may not find it easy to get the marketplace to embrace its technology. It has to convince Wall Street banks to participate in auctions that threaten...

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