Understanding the Resilience of CLO Structures in Turbulent Markets

Collateralized loan obligations are a credit safe haven as highly-indebted companies get dragged down by economic slowdown, according to PGIM Fixed Income. “These structures are bulletproof,” Greg Peters, the $860 billion asset manager’s co-chief investment officer, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Matthew Geudtner in the latest Credit Edge podcast. “The loan market could really come upon hard times and these structures will be fine,” says Peters, referring to higher-rated CLO tranches. Peters and Geudtner also discuss how to profit from liability management exercises, private debt relative value and growing default risk in the consumer and hospitality sectors.

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