The European Central Bank’s latest stimulus program has been a boon for the region’s CLO market in some ways. Issuance of new collateralized loan obligations has certainly picked up since ECB chairman Mario Draghi announced the bond buying program in March. 

But there’s a real downside to extremely low or even negative interest rates. Existing CLOs may not earn enough from their euro-denominated assets to pay the interest on the notes that they issue.

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