easy · Asset-Backed Securities clos
In a CLO, what is the 'Reinvestment Period'?
- The phase where all excess spread that is collected is swept into a reserve account until it reaches 5% of the total deal size.
- A period (typically 4-5 years) during which the manager can use principal proceeds from loan repayments to buy new loans for the portfolio.
- The initial period at the start of the deal, during which the manager must source and purchase all the original loans to fill the trust.
- A post-maturity window in which bondholders may elect to roll their entire returned par amount into a brand-new deal issued by the same sponsor.
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