via @OccupyWisdom :
Leveraged loans are very risky because the loan is “leveraged” against the private equity group’s capital & it’s ability to turn a struggling company around while paying off all the debt.
These loans are sold in packages (called collateralized loan obligations) to other investors much the same way as mortgages are bundled for people who want the stream of cash flows from a mortgage-debt investment. (Sound familiar?) Via