TOOLS
Login to access your documents and resources.
Alternative credit
Building diversified portfolios with CLOs
Collateralized loan obligations (CLOs) offer investors enhanced income, diversification and lower default risk compared to traditional corporate bonds. Once available only to institutional investors, CLOs are now gaining attention from investors who recognize the unique benefits of this asset class.
What are CLOs?
CLOs are diversified, actively managed portfolios of broadly syndicated senior loans issued by corporate borrowers. These are pools of loans that are securitized or repackaged into interest-bearing securities of varying degrees of risk and yield and sold to investors based on their portfolio objectives. These securities, also known as tranches, can trade actively in the secondary market.
Related articles
Alternative credit is not a new phenomenon, however, up until the 2008 Global Financial Crisis (GFC), it was largely overlooked by investors.
Himani Trivedi, head of structured credit at Nuveen, shares her thoughts on the current state of the CLO markets and a view of what the coming year holds for CLOs.
The CLO market has moved into the mainstream and is appealing to new investors. Himani Trivedi, head of structured credit at Nuveen, reflects on its evolution in an expert Q&A analysis featured in private debt investor.
