This week, SFA’s newly created Research unit, led by Elen Callahan, published a white paper titled, “Collateralized Loan Obligations: Balancing Crucial Lending with Financial Safety and Soundness.” Our paper gives a primer on how Collateralized Loan Obligations (CLOs) work, the crucial role they play in our economy, and several misconceptions that are currently held by policy makers and market participants alike. The paper also takes a deep dive into the state of the CLO market and highlights areas regulators should be aware of that could impact the leverage loan market, CLO market and economy more broadly.

Read full paper here.

Read more via MarketWatch.