Cash balances for U.S. 2.0 collateralized loan obligations and for European CLOs have climbed in 2013, according to Thomson Reuters.
U.S. CLOs have approximately $15 billion in cash, which represents 5.6% of their assets, an increase from 4.6% of assets at the start of the year. This level may obscure the wide dispersion between CLO 1.0s and 2.0s, Thomson analysts said. CLO 1.0s have a higher share of cash in their portfolios—7.6%—compared to CLO 2.0s with 2.3%. This cash share of CLO 1.0s increased this year, though it did decrease slightly in July. This means that it is more difficult to deploy cash as CLOs move out of their reinvestment periods.