CLOs: Understanding COVID-19’s Impact on Credit – Essential Tier Cut

Published on
July 17th, 2020
37 minutes

CLOs: Understanding COVID-19’s Impact on Credit – Essential Tier Cut

Presentations ·
Featuring Chris Whalen, Ralph Delguidice, and Jason New

Published on: July 17th, 2020 • Duration: 37 minutes

In this installment of Ahead of the Curve, Chris Whalen, chairman of Whalen Global Advisors, sits down with Ralph Delguidice, global macro strategist at Pavilion Global Markets, and Jason New, co-CEO and head of opportunistic credit at Onex, to break down the difference between the CDOs – that helped fuel the great financial crisis in 2008 – and the intricate world of collateralized loan obligations (CLOs) today. Delguidice and Whalen break down how CLOs work and the impact of COVID-19 on the CLO market. Both Delguidice and New provide their perspective on Frank Partnoy’s recent article called “Will the Banks Collapse?” in The Atlantic. New also explains how COVID-19 related defaults could impact the opaque asset class. Filmed in July 2020. For access to full interviews, join Real Vision Plus.



  • UM
    Ulf M.
    18 July 2020 @ 01:23
    Hi guys, I think the transcript is a bit messed up. First page shows the content of this piece and the following pages are from the interview between Raoul and the Northmantrader. Could you please correct this?
    • JS
      Jonathan S.
      19 July 2020 @ 13:27
      Yes. It’s off
  • RS
    Rishi S.
    18 July 2020 @ 16:09
    Nice having the different viewpoints on these instruments. Each of their views was in conflict a bit – one saying that these CLOs are limited in terms of how much they can participate in a distressed exchange with post-reorg securities, and the next implying recoveries will be just fine even in default because of the senior position these loans have in the capital structures. Likely the devil is in the details of these indentures somewhere. Would love to hear more from RV on this topic, as it's clear defaults are increasing, and restructurings are bound to continue even through an economic recovery. Chris is a thoughtful interviewer, and I'd agree with his point that you have professionals on both sides of the table here, both at the tranched paper level, as well as at the underlying loan collateral level which is likely an overlooked strength of the syndicated loan market. Guessing that middle market CLOs are probably a different story...
  • MF
    Michael F.
    18 July 2020 @ 14:16
    These constant notification sounds are quite annoying.
  • MF
    Michael F.
    18 July 2020 @ 14:16
    These constant notification sounds are quite annoying.
  • JH
    Joel H.
    18 July 2020 @ 11:30
    Great segment, thank you guys
  • JL
    Jack L.
    17 July 2020 @ 23:13
    Really enjoy Chris Whalen's pieces, both as interviewer and -ee. He seems always cautious to present facts and analysis with the minimum possible narrative spin. That style is valuable in any period but especially now during the market uncertainty & financial stress of the early post-COVID era.
  • DB
    Donna B.
    17 July 2020 @ 22:38
    This was informative. Good job!
  • NR
    Nathan R.
    17 July 2020 @ 14:48
    Jared Vennett : [pulling blocks from a Jenga tower] As, zero. Bs, zero. Double Bs, zero. Trible Bs, zero... [the tower topples] Jared Vennett : And then that happens. Mark Baum : What is that? Jared Vennett : That's America's housing market. [Baum's team stares in utter shock] Jared Vennett : Thank you. Jared's Assistant (Chris) : [delighted] Fuckin' A, Jared. Jared Vennett : Shut your fuckin' mouth. [Chris' face falls in embarrassment]