CLO Market and Corporate Lending

52 Pages Posted: 21 Feb 2019 Last revised: 19 Apr 2021

See all articles by Angela Gallo

Angela Gallo

Cass Business School

Min Park

University of Exeter

Date Written: April 19, 2021

Abstract

We investigate whether access to the CLO market as collateral managers or underwriters of CLO deals affects lenders' ability to overcome an idiosyncratic negative shock. We find that shocked lenders decrease their origination of loan facilities, but the effect is weaker for lenders with access to the CLO market. These lenders increase their loan supply (11\%) but only for securitizable Term B facilities. Our results suggest that the CLO market is actively used by lenders to overcome a negative shock by switching to off-balance sheet lending.

Keywords: Structured finance; Collateralized loan obligations (CLOs); Syndicated loans; Risk management.

JEL Classification: G21, G23, G24

Suggested Citation

Gallo, Angela and Park, Min, CLO Market and Corporate Lending (April 19, 2021). Available at SSRN: https://ssrn.com/abstract=3338514 or http://dx.doi.org/10.2139/ssrn.3338514

Angela Gallo

Cass Business School ( email )

London
Great Britain

Min Park (Contact Author)

University of Exeter ( email )

Streatham Court
Exeter, EX4 4PU
United Kingdom

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