Lehman Brothers Flushes into CLO

Lehman joins Deutsche Bank AG and Credit Suisse Group in creating CLOs to reduce loans on their books without selling them in the open market.

Deutsche Bank created two balance sheet CLOs, both named Genesis, in September and November. Credit Suisse formed the $1.7 billion Integral Funding in September.

Today, Lehman Brothers seeking to get high-risk, high-yield loans off its books, created the "Freedom" $2.8 billion collateralized loan obligation.

Banks have $200 billion of buyout debt they can't easily sell after the price of leveraged loans tumbled to 88.8 cents on the dollar from 100 cents on the dollar last June.

Hattip To Bloomberg.

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