Wall Street’s Toxic Chem Labs At It Again—CLOs Double From 2008 to $548 Billion

The presence of the hyperrich in deals underscores the widening demand for CLOs, a three-letter acronym that’s inspired fear and fervor in the debt markets this year. Proponents point to the CLOs’ potential for double-digit returns, resilience to rising interest rates, and low defaults through last decade’s financial crisis. Others such as KKR & Co.’s Jamie Weinstein, however, have raised questions about whether the frenetic pace of sales is spurring reckless behavior just as the prospect of an economic downturn looms over an increasingly leveraged corporate America.