EFTA Document EFTA01462182

CLO - Simple and Transparent Structure Used Since Early 1990s • In essence, a CLO is nothing more than a finance company set up to purchase and manage a pool of primarily senior secured bank loans • Like a finance company, the loan assets are financed by raising senior debt and junior capital or equity from investors in the capital markets • Senior debt tranches rated AAA - BB benefit from credit enhancement • Equity benefits from term-non recourse, non mark-to-market financing provided by