Let's buy CLO triple As, large asset manager tells pension client

By Sayed Kadiri

A large US asset manager has relayed to one of its clients in a letter, that it aims to start buying CLO senior notes as part of its high yield mandate

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TAGS: CLO Lord Abbett Institutional investor

Comment by: Anonymous. Posted 5 years ago [2014-04-16 00:24:11]

Hmmm, an investment banker somewhere should educate Lord Abbett with the proposal that a CLO mezz tranche would better fit a high-yield strategy. It seems odd to me to buy triple-A into HY unless you're barbelling the rating distribution deliberately. Further, I hope Lord Abbett is disclosing to the Oklahoma teachers that the CLO bonds are private placements. Nothing wrong with that in this asset class, but it's an important explicit disclosure.