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The loan market is busy — but for a lot of CLO managers, it’s busy in exactly the wrong way.

While primary market activity has increased over the past few weeks, there’s very little new-money supply. Most borrowers are focused on repricings, refinancings and amend-and-extend deals, as we noted earlier this week.

This leaves CLOs, the biggest buyers of leveraged loans, in a tough position. Many are reaching the end of reinvestment periods, and are therefore constrained by their WAL tests, which restrict the weighted average life of loans in the portfolio.