LatestAll news

Home / Use cases / PCT-042

Monitor portfolio · PCT-042 · Sourced card

CLO cushion table, every month

Pulls a stack of CLO trustee reports into one monthly table of OC and interest-diversion cushions, CCC buckets and equity distributions.

CLOsSample data · real docs confidentialVendor + in-house
INPUTMonthly CLO manager reportsAI STEPSExtract cushions · Normalize definitions· Rank cushion lostOUTPUTOne cushion table across dealsHUMAN CHECKWhether to sell, hold or engage themanager

Today vs automated

TODAY
  1. Open 30 PDFsAnalyst · manual
  2. Copy OC/IC cushionsAnalyst · manual, re-keying
  3. Normalize by handPM · manual
  4. Email / meeting hand-offAnalyst → PM
AUTOMATED
  1. Monthly trustee reports arriveTrigger: starts on its own
  2. Extract cushionsAutomated · Document store
  3. Normalize definitionsAutomated · LLM
  4. Rank cushion lostAI draft, human review · Monitoring model
  5. Whether to sell, hold or engage the managerApprove / override · PM

AutomatedAI draft, human reviewHuman onlyTools: Inbox / portal, Document store, LLM, Monitoring model, Loan system

Estimated valueestimate

120–340 analyst hours a year
$18k–$84k of time, vs an assumed $20k–$100k tool cost

Net: −$82k to $64k a year net of tool cost; at the low end of the assumptions it does not cover the tool cost.

Manual15–30 h per monthWith AI2–5 h per month, review included
Assumptions
  • 15–30 analyst hours per month today; 2–5 hours with an agent, including review
  • 12–12 months a year for one team
  • $150–250 per hour loaded cost
  • Tool or build cost $20,000–100,000 a year (both)

Estimate, based on the assumptions shown; your numbers will differ. How we estimate

What else it can do for the team

  • Rank deals by cushion lost
  • Flag managers with rising CCC buckets
  • Draft the investor update
  • Track reinvestment period ends
  • Compare manager trading behaviour
How you get thereFour steps from prompting to an agentic workflow; most teams start at step 4.
1 · PromptingAn analyst asks a chat tool about one month.
Needs: an approved AI tool, a confidentiality policy.
Risk: unchecked answers, data pasted outside policy.
2 · WorkflowA fixed pipeline extracts the same fields into your template every time.
Needs: field definitions, a template, document parsing.
Risk: breaks silently when formats change.
3 · AgentIt watches the inbox or data room, runs the checks and drafts the output.
Needs: inbox/doc-store access, system write-back, logging.
Risk: acting on a misread; needs review gates.
The automated lane above
4 · Agentic workflowSeveral agents work across the deal or book; people approve exceptions.
Needs: shared data model, permissions, audit trail, exception queue.
Risk: errors compound across steps; needs monitoring.
Typical starting point
Solution optionsBuy, build or hybrid, with the trade-offs of each.
Buy
No vendor verified for this workflow in our directory yet.
Fastest start; you adapt to the product's data model and pricing.
Build
An LLM API, a document parser, a vector or document store, your data warehouse, and a review queue.
Fits your definitions exactly; you own maintenance and controls.
Hybrid
Vendor extraction feeding your own checks, templates and systems.
Common middle path; two things to integrate and govern.

Listing is not endorsement.

What changes for the team15–30 h → 2–5 h per month (estimate); coverage goes from a sample of borrowers, quarterly to every borrower, every delivery.
ROLESAnalysts move from re-keying packs to reviewing exceptions and calling borrowers.
CYCLE TIME15–30 h → 2–5 h per month (estimate)
COVERAGEFrom a sample of borrowers, quarterly to every borrower, every delivery.
CONTROLSEvery output cites its source; approvals and overrides are logged.
How it works

Full title: CLO equity and mezz surveillance: 30 deals, 12 managers, one cushion table the morning reports land

“Three deals lost more than a point of junior OC cushion this month. Two of them share the same five loans.”

Scenario

SAMPLE: an investor holds equity and BB notes in 30 CLOs from 12 managers. Monthly reports arrive as PDFs in different formats over a week.

What the human still decides

Whether to sell, hold or engage the manager. The agent reads and ranks; the report and the trustee remain the record.

Why it matters

Morningstar DBRS reports its distressed private credit ratings rose to 18% of the book from 14% a year earlier, and middle-market CLO issuance hit a 2026 monthly high in September (Trepp). Cushions are where it shows first.

What the record shows

Checked 2026-10-15.

September 2026 US CLO issuance was $41.1bn, with BSL at $34.3bn across 77 deals but only $13.8bn of new issue: refinancings and resets dominated, and AAA spreads tightened. Resets reprice the liability side while DBRS's CCC share on middle-market credits rose to 18% from 14%. Equity cushions are being squeezed from both ends.

Try it: prompt and data
From these SAMPLE CLO monthly reports, extract junior OC and IC test values and triggers, CCC %, defaulted par, WARF and the last equity distribution, each with a page cite. Put them in one table, compute month-on-month change, and flag any metric whose definition differs between reports.

Data

Method shown on SAMPLE data. Real trustee/monthly reports are confidential: approved internal tools only.

Who uses it, vendors and build
Segments
CLOs
Who uses it
CLO equity / mezz investor, Structured credit analyst, Insurer ALM
Build
Vendor + in-house
In-house
PDF table extraction plus a definitions map per manager. Estimate: 3–4 weeks; validate against the investor's existing surveillance.
Last verified
2026-10-15

Vendors that claim this capability

  • No vendor claim verified for this workflow yet.

Tags reflect each vendor's own public claims at the linked page (checked 2026-10-15). Not tested, ranked or endorsed.

Sources and related
In the news.

Next step

Get new walk-throughs

Subscribe to the newsletter

Not investment advice. Names marked SAMPLE are fictional. Found an error? See the corrections log.