Glossary

Reinvestment Period

The defined window in a CRE CLO's life, typically the first one to three years, during which the collateral manager may use principal proceeds from repaid or sold loans to purchase new eligible collateral rather than paying down noteholders.

The reinvestment period lets a CRE CLO function as a revolving financing vehicle for a bridge lending platform, allowing the manager to originate new transitional loans and contribute them to the pool as existing loans season, refinance, or stabilize and exit. Reinvestment is bounded by eligibility criteria (property type, geographic and sponsor concentration limits, loan-to-value thresholds) and collateral quality tests that must be satisfied both before and after any reinvestment; a manager cannot reinvest into collateral that would breach an overcollateralization or interest coverage test. Once the reinvestment period ends, principal proceeds are instead applied sequentially to amortize the notes starting with the most senior class, shifting the structure from an actively managed vehicle to a static, deleveraging one.