In collateralized fund obligations, general partners typically purchase the fund assets of limited partners, allowing the GPs to add leverage and the LPs to diversify their holdings and gain liquidity.

Reset and refinance deals accounted for nearly 60% of last year’s bumper crop of CLOs that totaled more than $607 billion. (Includes two data tables.)

The complaint argues that equity investors used their market dominance to pressure CLO managers to keep credit spread adjustments artificially high for leveraged loans transitioning to SOFR.