On 3 June 2024, the International Organization of Securities Commissions (IOSCO) issued a final report – Leveraged Loans and Collateralised Loan Obligations (CLOs) Good Practices for Consideration.

The final report reflects the results of a public consultation launched on 14 September 2023.

In the final report IOSCO provides an overview of the leveraged loans and CLO markets and explains why vulnerabilities identified in these markets could impact certain of its objectives including protecting investors.  The final report also describes twelve good practices grouped into five themes:

  • Origination and refinancing based on a sound business premise.
  • EBITDA and loan documentation transparency.
  • Strengthening alignment of interest from loan origination to end investors.
  • Addressing interests of different market participants throughout the intermediation chain.
  • Disclosure of information on an ongoing basis.

While the good practices do not comprise either standards or recommendations, they are designed to support market participants in their decision making when operating in the leveraged loans and CLO markets.