- The CLO CEF senior security sector is easy to overlook, but it has a number of attractive features such as decent yields, strong asset coverage levels, and mandatory maturities.
- Investors have to be mindful of a number of pitfalls, however, such as how to calculate yield and how to treat asset coverage.
- We discuss how to gauge the risk / reward in the sector, focusing on the yield-to-worst and our bespoke Stress Test Recovery metric.
- In the sector, we like the new preferred EICA as well as OXLCL and OXSQL.
For further details see:
CLO Preferreds And Baby Bonds Update: Attractive Sector If You Avoid The Pitfalls