A "Safe" 6% Yield: The Case for Investment Grade CLOs

A "Safe" 6% Yield: The Case for Investment Grade CLOs

How leveraged loans and CLOs work and how to invest in them. What are the risks and opportunities with the new CLO ETFs.

Topics covered include:

  • What are the characteristics of leveraged loans and how David has invested in them in the past, both professionally and personally.
  • Why LIBOR reference rate for leveraged loans is being phased out
  • What is the current investing climate for leveraged loans
  • How collateralized loan obligation work
  • Why insurance companies are fighting over CLOs
  • What are the different ways to invest in CLOs


For more information on this episode click here.

Show Notes

Companies, Lenders Clash Over Loan Spreads in Switch from Libor by Mark Maurer—The Wall Street Journal

Libor: The Spider Network—The Wall Street Journal

Collateralized Loan Obligations (CLOs) Primer by Jennifer Johnson—NAIC and The Center for Insurance Policy Research

Investing In The Middle: Tapping Into Opportunities in Middle Market Lending—AllianceBernstein

Top 10 US CLO Managers: CLO AUM (30 Nov 2022)—CLO Research

Default, Transition, and Recovery: 2021 Annual Global Leveraged Loan CLO Default And Rating Transition Study—S&P Global Ratings

U.S. BSL CLO And Leveraged Finance Quarterly: Is Winter Coming? by Stephen Anderberg, Daniel Hu, Et al.—S&P Global Ratings

Risk Assessment of Structured Securities - CLOs by Eric Kolchinsky, Charles A. Therriault, Marc Perlman—National Association of Insurance Commissioners (NAIC)

Monthly US CLO Index - December 2022—Fitch Ratings

Private equity-backed insurers under US scrutiny over risky loans by Antoine Gara and Sujeet Indap—The Financial Times

Private Equity Taps Insurers' Cash to Speed Up Growth by Matt Wirz and Leslie Scism—The Wall Street Journal

Investments Mentioned​

Virtus Seix Floating Rate Income Fund (SAMBX)

Virtus Seix Senior Loan ETF (SEIX)​

Invesco Senior Loan ETF (BKLN)​

DoubleLine Flexible Income Fund (DFLEX)​

BlackRock Debt Strategies Fund (DSU)

BlackRock AAA CLO ETF (CLOA)

iShares Treasury Floating Rate Bond ETF (TFLO)​​

Janus AAA CLO ETF (JAAA)

Janus B-BBB CLO ETF (JBB)​

VanEck CLO ETF (CLOI)

Eaglepoint Credit Company (ECC)

Oxford Lane Capital Corp (OXLC)

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