A CLO pools hundreds of leveraged loans and funds them by selling slices of debt and equity with different levels of risk.
What the film says
In private credit, hundreds of loans can be sold in slices. That's a CLO. A collateralized loan obligation. Say it owns five hundred million of loans. Safer slices pay less. The riskiest slice is the equity. So why do investors care? CLOs are among the biggest buyers of leveraged loans. So their demand moves lending markets.
In the glossary: CLO
A simple example with round numbers, not advice. Terms vary by fund.
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