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I bet a part of the reason is that both use CLOs to fund their transactions and CLO markets are absolutely getting hammered for various reasons such as Libor's decline (AAA bonds were trading at negative spreads over Libor; what happens when Libor approaches 0?). They are also inherently leveraged to the hilt through CLO transactions on transitional & highly leveraged properties.
@CRESEA Kind of a tangent here, but do you mind explaining how CLO financing works?
My understanding is that IBs purchase, package, and securitize loans and then sell them off in tranches on the public market, so how does that help finance a company?
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