OXLCZ - OXLCI: Keeping An Eye On This 8.1% Yielding Bond
2024-07-18 12:23:11 ET
Summary
- CLO CEF bonds offer low volatility, high asset coverage, and protective conditions, making them attractive income assets.
- We have had our eye on the CEF OXLC 8.75% bond OXLCI ever since it was announced.
- Quicky after issuance, the yield of the bond dropped to 8.1% from 8.75% with the differential to its sister bonds shrinking to 0.15%. We would be buyers north of 8.5% yield.
A couple of weeks ago, we highlighted that we were looking forward to the issuance of the CLO CEF OXLC 8.75% 2030 bond ( OXLCI ). Our view was that not only was the bond's coupon very attractive relative to the underlying risk, but that the coupon was around 0.6% higher than the yields of its two sister bonds OXLCL and OXLCZ. Our view was that getting in early was a good bet, as the yields between the bonds would converge fairly quickly....
OXLCI: Keeping An Eye On This 8.1% Yielding Bond