Centrifuge explains CLO structure for onchain credit

If you’ve ever wondered what happens when Wall Street’s most complex credit products meet programmable money, Centrifuge just published the receipts. Nick Cherney, Head of Innovation at Janus Henderson, released a series of educational videos explaining the mechanics of collateralized loan obligations, or CLOs, and how their structure is being replicated onchain through the Janus Henderson Anemoy AAA CLO Fund, known as JAAA. The fund has accumulated roughly $687 million in assets under management and is live across eight different blockchain networks, including Ethereum and Solana. How a CLO actually works CLOs are one of those financial instruments that sound intimidating but follow surprisingly logical plumbing. At their core, a CLO pools together a diversified portfolio of floating-rate corporate loans, typically between 140 and 180 individual loans, and bundles them into a single structure. Investors don’t buy the whole pool. Instead, they buy slices, called tranches, that carry different levels of risk and reward. The magic is in the waterfall. Cash flows from the underlying loans, think interest payments and principal repayments, get distributed top-down through the tranches....