As a boutique corporate service provider, Trustmoore chooses quality over quantity when it comes to providing administrative services for collateralized loan obligations (CLOs). Our structured finance and capital markets services team, is composed of industry veterans and market experts.
The team benefits from a broad network of contacts and years of expertise in CLO issuer incorporation and administration. Our team are widely recognized within the sector, many having been active in the market since the launch of the first European CDO in 1999. Senior team members have worked on over 250 European CLOs since, both as advisors and directors, including on the first synthetic EU CLO in 2002 and the first CLO 2.0 in 2013. Given the team’s experience and expertise, many are frequently asked to share their expertise at CLO and Structured Finance panels and conferences.
Our team functions as a true bridge between market professionals thanks to our established relationships with CLO managers, law-firms, arrangers, rating agencies and trustees, as well as other advisors.
CLOs and CLO compliance
We employ a boutique approach when we are establishing fully independent third-party structures. That means that we tailor our services to our clients’ needs and requirements. Because we focus on quality we don’t implement processes that benefit us as a company – we only concentrate on finding the optimal solution for your situation.
Some of our most recent work includes the creation of an . In this particular case, our mandate included directorships, accounting, domiciliation, tax-compliance and reporting. As part of our collaboration with an established European CLO Manager, another recent success has been our participation in the setting up and servicing of a newly established ESG-compliant CLO.
We’ll gladly explain our CLO services in more detail to you in person, or you can read a summary of what we do below.
Our CLO Services
Governance
- SPV Incorporation
- Capitalization and ownership
- Company secretarial services
- Local tax registration
- Transaction management, coordination and assistance
- STS & ESMA reporting
- Independent directorships of companies: personal and/or corporate board members
- Post-transaction dissolution services
Administration, accounting, tax and tailored reporting
- Statutory accounting/financial statement preparation under various GAAP systems and/or IFRS
- Consolidated financial statements
- Perform NAV calculations (for investor reporting)
- Cash management, calculations- and payment services
- Audit coordination and support
- Tax computing and filings (VAT/CIT/PFIC)
- Regulatory reporting (ECB/FATCA/CRS/EMIR)
- Investor reporting
Trustee-related services
- Security-trustee services
- Collateral agent
- Escrow agent
- Data agent
- Back up servicer and verification agent
- Specialist ancillary services to the above
Our team
Our structured finance and capital markets services team is dedicated, highly skilled and experienced. It includes fixed-income, capital markets, corporate and tax law and accounting specialists.
Based in leading global financial centers, our experts understand our clients’ businesses, challenges and priorities. We operate in an efficient and expedient manner, supported by Trustmoore’s global network of more than 300 employees. Reach out to any of our CLO services team members through the details below:
FAQ
A Collateralized Loan Obligation (CLO) is a sophisticated financial structure that pools together a diverse mix of loans, typically corporate loans bearing varying degrees of credit risk. These pooled loans serve as collateral for a series of issued bonds and equity, segmented into tranches according to their risk and return profiles. This structuring allows for efficient distribution of loan payments and risk among investors.
The fundamental purpose of a CLO is to provide investors with an opportunity to engage in a diversified and managed portfolio of loans. By aggregating loans, a CLO can dilute the impact of individual loan defaults, offering a more stable return on investment. For corporations, CLOs represent a vital source of financing, enabling them to secure loans under favorable conditions.
Both CLOs and CDOs are structured finance instruments that pool various types of debt and issue tranches of securities. The key distinction lies in their underlying assets: CLOs are backed exclusively by loans, particularly leveraged loans, while CDOs may encompass a broader range of debt instruments, including bonds, mortgage-backed securities, and other loans. This difference fundamentally affects the risk profile and investment strategy associated with each.
The composition of a CLO can vary widely, typically encompassing 100 to 300 loans. The diversity and number of loans are strategically chosen to balance risk and return, ensuring that no single borrower's default significantly impacts the overall performance. The precise number depends on the CLO's size and the manager's investment strategy.
A CLO administrator undertakes a crucial operational role, encompassing asset monitoring, investor payment calculations, compliance, record-keeping, and financial reporting. Their expertise ensures the integrity and performance of the CLO, adherence to regulatory standards, and transparent communication with investors.
Administering a CLO is a multifaceted process requiring a blend of financial acumen, legal compliance, and strategic oversight. Key activities include portfolio management, compliance monitoring, financial calculations, and stakeholder reporting. Success in CLO administration demands a comprehensive understanding of structured finance principles and meticulous attention to operational details.
CLO stands for Collateralized Loan Obligation, denoting a structured financial product that pools loans to create securities differing in risk and return, offered to investors. This mechanism facilitates investment in a slice of the income generated from the aggregated loans.
The CLO method involves aggregating commercial loans of varying credit quality, structuring them into risk-differentiated tranches, and selling these tranches to investors. This approach enables credit risk diversification and grants investors access to income streams from underlying loans, balancing risk with potential returns.
Environmental, Social, and Governance (ESG) compliance introduces a layer of criteria evaluating the sustainability and ethical impact of investments within a CLO. ESG-compliant CLOs prioritize investments in companies that meet specific sustainability and ethical standards, influencing loan selection and management practices. This shift reflects a growing market demand for responsible investing and can enhance the attractiveness of CLOs to a broader investor base.
The CLO market is evolving under the influence of technological advancements, regulatory changes, and shifts in investor preferences. Emerging trends include increased transparency, the integration of ESG factors into investment decisions, and the adoption of technology for better risk management and operational efficiency. These trends are likely to redefine CLO structures, administration practices, and market dynamics in the coming years.
Reach out to us today
Huub Mourits
[email protected]
Jamie Prins
[email protected]
Sinead Bald
[email protected]
Fiona Kettner
[email protected]
Hugo Charpenel
[email protected]
© 2020 TRUSTMOORE All rights reserved.
ISAE3402 CERTIFIED