Fitch Ratings is concerned about the way some managers of collateralized loan obligations account for the leveraged loans pooled in the securities. "Today, CLO managers are seeking approval from note holders and rating agencies for changes to the structural terms of their transactions regarding discounted security thresholds to adapt to the current market environment," said Elizabeth Nugent, senior director at Fitch. "Fitch encourages investors to review amendments carefully to determine if changes are in their best interest before providing consent."

Related Summaries