The Cayman Islands is continuing to be the domicile of choice for US CLO managers. CLOs securitise assets, typically leveraged loans, by pooling them together and paying out income and principal repayments from the pool to note holders.
CLO investors buy tranches of a transaction with specific seniority and payout structures, hence taking different degrees of risk.
CLOs have made a comeback after the financial crisis as they offer investors the opportunity to access leveraged loans at attractive yields. As reported by leading industry publications, including Creditflux and Leveraged Commentary & Data, approximately 286 deals were priced during 2018.