Exploring the World of Collateralized Loan Obligations (CLOs)

The chapter dives into the securitization process of CLOs, showcasing how diversification of loans creates a structured risk profile resembling corporate AAA credit. It discusses the historical performance of CLOs during the global financial crisis, emphasizing price movements and recovery post-crisis. The chapter also addresses concerns about debtor impact on European CLOs, risk management strategies, and the role of competent managers in navigating risks.