-- Daniel O’Leary

Collateralized loan obligations are seeing a unique boost from loan modifications, whereas investors in other asset classes, such as agency mortgage bonds, are seeing steep coupon reductions.

According to Morgan Stanley analysts, 100% of agency mortgage bonds amended under the U.S. Department of Treasury's Home Affordable Modification Program have coupons that fell in value—by more than 50% in most cases. Modified CLO assets, however, see spreads spike 140 basis points on average,....

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