Eagle Point Credit's Ko on Leveraged Loans, CLOs

The video discusses the current state of the loan market, highlighting the increase in defaults and downgrades due to rising interest rates. It compares CLOs to banks, emphasizing the stability of CLOs in volatile times. The discussion shifts to the attractiveness of secondary markets over primary ones, especially during market dislocations. The potential impact of a US debt default on the CLO market is considered, noting the strong structural protections of AAA and AA CLOs. Finally, the ongoing transition from LIBOR to SOFR is explored, with a focus on its implications for the loan market.

What are the implications of rising interest rates on loan issuers?

How do CLOs differ from traditional banks in terms of funding?

What factors make the secondary market more attractive than the primary market currently?

Discuss the historical performance of AAA and AA CLOs regarding defaults.

What potential issues could arise from a US default in relation to the CLO market?

Explain the transition from Libor to SOFR and its impact on the loan market.

What are the challenges faced by loan issuers during the transition from Libor to SOFR?