The recent and ongoing upheaval in Libor rates is producing divergent outlooks on debt and equity positions in CLOs, says the Loan Syndications and Trading Association.

In its weekly newsletter Friday, the LSTA noted that the sharp rise in the Libor benchmark rate over the past month has improved the yield environment for the floating-rate notes in collateralized loan obligations – particularly the ‘AAA’ notes atop the capital stack.

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