CLOI - CLO Debt: A 'Higher-For-Longer' Yield-Enhancing Alternative

2024-04-20 05:40:00 ET

Summary

• In a stabilizing economic environment, floating-rate CLO debt offers yield and resilience, making it an attractive alternative for income-seeking investors.
• After fixed income markets rallied into early 2024 due to increasing confidence in a soft-landing economic scenario, many fixed income products now have spread levels that are converging with their post-COVID and pre-Russia/Ukraine tights.
• Notwithstanding the potential for short-term macro-driven volatility, we remain confident in the ability of CLO debt to outperform similarly rated fixed income alternatives over the near to medium term.

By Jared Feeney, CFA

In a stabilizing economic environment, floating-rate CLO debt offers yield and resilience, making it an attractive alternative for income-seeking investors. ...

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