ABL Facilities vs. CLOs: Complementary Financing Tools for Private Credit

The panel examines how bank ABL facilities and CLOs serve complementary roles in private credit financing. ABLs offer flexibility and stability but less leverage; CLOs provide lower cost of funds and higher leverage but with more constraints. In Europe, ABLs dominate due to lower leverage demand, while US managers typically target around 2x debt-to-equity using a combination of both tools including BDCs.