The Carlyle Tweaks European CLO Payment Waterfall (27Jun25)

Carlyle Group is marketing a new European CLO with an unusual structure that allows the manager to pay themselves fees before conducting a test that could force them to use interest to repay bondholders. In a rating agency presale report for Carlyle Euro CLO 2025-2, the subordinated fee is shown as senior to the overcollateralisation test in the waterfall, a reversal of the typical order.

This content is part of Octus’ expanded CLO Insights.

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