The Importance of Assurance of Execution in Private Lending

Banks are unwilling to make commitments or backstop deals given they don't have the assurance of the takeout. The CLO market is extraordinarily efficient, particularly in periods of calm as it relates to obvious types of credits that just want funded debt borrowing at the cheapest possible price. What CLOs are not good at is coming up with optionality in capital structures that allow businesses to engage on a business plan which may need embedded M&A capital.