concentration limitations in addition to the loan diversity. We just discussed. There are also restrictions on concentrations of certain kinds of assets.

Clo and other structured product managers must follow these guidelines when buying and trading assets for the portfolio.

The limitations are referred to as buckets. The most common buckets are for the following kinds of assets.

Fixed rate assets, which can create conflict with floating rate assets that dominate the fund send the annual payment which can conflict with quarterly paying assets.

Covenant light or covalite loans which have very few protections compared to other kinds of loans.

current pay these are assets where the obligor of the underlying asset is in default on another type of debt in their capital structure. But continue to pay interest on the loan that is in the portfolio.

Deferable assets. These are loans that allow the obligor to defer interest payments while maintaining their performing rating.

And lastly Triple C rated loans while the number of Triple C rated loans in a pool will generally be limited. It is also crucial to look at the loans just above the Triple C threshold as a small shift could pull many of those loans into Triple C and force a collateral manager to be in violation of the concentration buckets.