Elgin Capital, a London-based asset manager, will start purchasing debtor-in-possession loans backing U.S.-based companies for its CLOs.

The firm is looking to add the DIPs to its Dalradian European II, III and IV CLOs. It couldn’t be determined how much the firm is looking to buy.

“We have seen in recent months that the ability to provide DIP financing can materially improve the recovery made on prebankruptcy loans,” according to a Elgin statement. “Lenders who provide DIPs are often able to negotiate preferential treatment compared to those lenders that cannot.”

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