KBRA UK Releases Research – Loss Mitigation Obligations: CLO Workout and Flex
LONDON–(BUSINESS WIRE)–Kroll Bond Rating Agency UK Limited (KBRA) releases research on the widespread adoption of provisions relating to workout or loss mitigation obligations (LMOs) in the vast majority of newly issued—and even refinanced—U.S. and European broadly syndicated loan CLO (BSL CLO) offering documents, as market participants grapple with the prospect of further economic fallout from the COVID-19 pandemic.
As CLO collateral managers continue to anticipate stress on corporate obligors within their portfolios, LMO provisions allow them the latitude necessary to participate in workouts or restructurings in order to preserve and/or enhance the recovery value of their positions.
In this report, KBRA highlights some of the key issues around LMOs, including credit and management considerations.
Click here to view the report.
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KBRA is a full-service credit rating agency registered in the U.S., the EU and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.
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