Eagle Point's View on Portfolio Performance

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Eagle Point sees more defaults coming ahead. We see more downgrades coming ahead. Despite the performance that we've seen, we do think it's an interesting time to be investing in CLO equity. These are the times where we can take advantage of discounted prices within the loans.

The end of Libor is a little over a week away, and some US corporate borrowers are still racing to switch their floating rate loans to SOFR ahead of the 30 June deadline.

The loan market’s transition away from the old reference rate has been slow, but increasingly contentious in recent months. Borrowers, lenders and financial sponsors have tussled over the compensation offered to loan investors to swap into the lower-yielding SOFR benchmark.

In this week’s edition of Cloud 9fin, US deputy editor David Bell sat down with Dan Ko, a senior principal and portfolio manager at Eagle Point Credit Management to talk about how CLO equity investors rallied loan buyers to resist off-market SOFR amendments — as well as the challenges and opportunities in CLO equity as more deals exit their reinvestment periods.