CLO re-financings and resets are expected to surge by year end as loan markets transition out of London Inter Bank Offered Rate (LIBOR). U.S. regulators have advised banks to cease originating LIBOR-based loans by December. The transition is not expected to be seamless, with market participants continuing to contemplate aspects of the LIBOR replacement benchmark for CLOs. The lack of clarity regarding a LIBOR replacement may result in heightened market volatility causing CLO premiums to widen in the near-term.

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