Senior CLO noteholders awake to the strong possibility that recent vintage deals could be called, putting them at risk of having to reinvest their funds in lower-yielding assets.

According to anaysts at the Royal Bank of Scotland, they are trying to do something about it. In a report published today, Richard Hill and Kenneth Krosner said there have been some “structural developments” to potentially mitigate the call risk, including negotiating “make whole clauses” and original issue discounts.

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