Spreads on collateralized loan obligations CLO spreads may have tightened quite a bit over the last two years, but they still have a long way to go, according to panelists at the American Securization Forum’s annual meeting.

Interest rates on sub-investment grade loans are still relatively attractive and corporate defaults are still quite low, but the main reason panelists expects CLO spreads to continue tightening is that they have some catching up to with spreads on other kinds of structured products.

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