Creaky credit sparks ‘high’ dispersion in CLO pricing
August 02, 2023
Article by Nathan Tipping on Risk.net discusses the resurgence of dispersion in credit markets following 18 months of central bank rate hikes. This trend is particularly noticeable in collateralized loan obligations (CLOs), where pricing has become fragmented, as evident from data provided by KopenTech. The dispersion is attributed to various factors, including differing manager reputations, changing loan market dynamics, and variations in market value of over-collateralization (MVOC) profiles.