In regards to the practice of using delayed-draw tranches by CLO fund managers in order to avoid paying liability costs until the loans are fully vested, partner Neil Weidner commented, "Using delayed-draw tranches can alleviate some of the pressure on managers concerned about receiving favorable loan allocations in the new issue market…I think you are going to see more managers attempt to take advantage of the delayed-draw feature in the second half of the year as managers respond to the competitive environment for loan assets."
RLPC-CLO managers buy time with delayed draw tranches, Reuters
May 23, 2013