CLO Investing: With an Emphasis on CLO Equity & BB Notes

by Shiloh Bates

Collateralized Loan Obligations (CLOs) were left for dead after the Global Financial Crisis (GFC) of 2008-2009. Since then, CLOs have made a surprising comeback. Their popularity among investors is partially the result of impressive CLO performance during the GFC and beyond. CLO notes issued before the GFC did not have material defaults, and many CLO equity securities issued prior to the GFC ended up with annualized returns above 20%. Today the CLO market has over $1 trillion in assets under management and has replaced banks as the largest lender to private equity-backed companies.

CLO With an Emphasis on CLO Equity & BB Notes describes CLOs in detail, emphasizing the securities with the highest risk and reward potential, CLO BB notes and equity. The readers of this textbook will learn the characteristics of the CLO’s leveraged loans, financing structure, payment rules and tests, and historical returns. As CLOs are gaining in popularity, investment professionals of all varieties will benefit from author Shiloh Bates’s meticulous understanding of this unique market and the strategies for successfully investing in it.

220 pages, Paperback

Published July 24, 2023

Reviews

[Jennie Yang · Rating 3 out of 5]

Exhilarating.

[Pat Keenan · Rating 5 out of 5]

A very digestible and helpful introduction to CLO investing. This book does a great job breaking down complex concepts in an accessible way. I’d also recommend listening to the author’s CLO Investor Podcast for additional insights from different CLO market participants.