Post Reinvestment Criteria in European CLOs

In this updated trend report we highlight Post Reinvestment Criteria provisions and trends observed in European CLO during the full year 2024 and until H1 2025 transactions. 

During 2024, our reviews showed that these provisions were significantly protective in nearly all transactions, with only a few escaping investor’s scrutiny. Our analysis of final offering circulars of 161 European 2024 transactions revealed that only two transactions lacked a Weighted Average Rating Factor Test and only two did not include a Weighted Average Life Test in Post Reinvestment Criteria provisions.

In the first half of 2025, the trend of protective Post Reinvestment Criteria provisions continued across all the transactions we reviewed. Our analysis of 87 European transactions in H1 2025 revealed that only 7 transactions were issued lacking a Weighted Average Rating Factor Test. Furthermore, most of the transactions (64) contained both a Weighted Average Life Test and Weighted Average Life Test based on final/pricing preliminary offering circulars.