OXLC - CLO Closed-End Funds: Baby Bonds And Preferred Offering Steady Income
2024-06-28 10:20:49 ET
Summary
- Collateralized loan obligation closed-end fund preferreds and baby bonds can offer relatively secure sources of income generation for investors.
- These offerings are subject to stricter regulations under the 1940 Act, limiting leverage and that can provide more security to these instruments.
- New offerings since our last update include EICC and CCIA, which naturally came with higher issued yields thanks to the higher rate environment.
Written by Nick Ackerman, co-produced by Stanford Chemist.
Last fall, risk-free rates were climbing, and fixed-income instruments such as preferreds and baby bonds were also getting pressured lower. At that time, we had taken a look at some closed-end fund ("CEF") preferreds and baby bonds that trade publicly for the collateralized loan obligation ("CLO") CEFs....
CLO Closed-End Funds: Baby Bonds And Preferred Offering Steady Income