How robust are CLOs through a recession?
As most of our readers know, ABS is an asset class that lends itself well to detailed underwriting, from onsite due diligence through to cashflow and risk modelling.
The BTL sector has taken a bit of a pounding over the last couple of years, as authorities introduced a number of harsh measures to counter fears of “financial stability risks” posed by growth in lending, with concerns that future financial tightening could lead to a surge in landlords looking to exit the market should they become stressed, and subsequently cause a house price crash. The measures included: