Twitter Loans May Be a Tough Sell for Buyers Wary of Tech
- Collateralized loan obligations have high exposure to tech
- Tech debt makes up the largest portion of B- loans in CLOs
Photographer: Alex FLynn/Bloomberg
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As banks led by Morgan Stanley think about selling $13 billion of Twitter Inc. buyout debt to investors, they face a serious hurdle: the biggest buyers of leveraged loans are already stuffed full of technology company debt.
Money managers who package loans into bonds known as collateralized loan obligations have about 11% of their holdings in software company debt, according to S&P Global Ratings. That’s by far the biggest concentration, with the next biggest exposure to healthcare providers and services, which is 6.6% of the portfolios.