CLOs: Finding Attractive Value Today

Streaming Income - A Podcast from Barings

Co-Head of Structured Credit Investments, Melissa Ricco provides insight into the current dynamics driving the collateralized loan obligation market and why she and the team are seeing compelling opportunities, particularly at the top of the capital stack.

Episode Segments:

(01:28) - The impact of higher rates and an uncertain macro backdrop on CLOs

(03:50) - The fundamental outlook and why CLOs may have less risk than loans

(05:29) - The default outlook

(07:43) - How credit rating downgrades can impact CLO cashflows

(09:28) - Why cashflow diversions have been accretive to equity in the past

(12:26) - How current supply/demand dynamics are shaping the outlook

(15:28) - Understanding manager tiering

(19:11) - Where the team is seeing value today

(22:34) - Parting thoughts for those allocating to CLOs

Certain statements about Barings LLC made by the participants herein may be deemed to be “testimonials” or “endorsements” as those terms are defined in rule 206(4)-1 under the Investment Advisers Act of 1940, as amended. Participants were not compensated in connection with their participation in this program, although in certain cases they are investors in Barings LLC sponsored vehicles. These investments subject such participants to potential conflicts of interest in making the statements herein.

IMPORTANT INFORMATION

Any forecasts in this podcast are based upon Barings’ opinion of the market at the date of preparation and are subject to change without notice, dependent upon many factors. Any prediction, projection or forecast is not necessarily indicative of the future or likely performance. Investment involves risk. The value of any investments and any income generated may go down as well as up and is not guaranteed. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. Any examples set forth in this podcast are provided for illustrative purposes only and are not indicative of any future investment results or investments. The composition, size of, and risks associated with an investment may differ substantially from any examples set forth in this podcast. No representation is made that an investment will be profitable or will not incur losses.

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Unless otherwise mentioned, the views contained in this podcast are those of Barings and are subject to change without notice. Individual portfolio management teams may hold different views and may make different investment decisions for different clients. Parts of this podcast may be based on information received from sources we believe to be reliable. Although every effort is taken to ensure that the information contained in this podcast is accurate, Barings makes no representation or warranty, express or implied, regarding the accuracy, completeness or adequacy of the information

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