CLO Monthly Monitor
With a U.S. economy that continued to surprise to the upside, despite numerous looming headwinds, CLO debt across the capital stack has exhibited strong returns year-to-date.
CLO tranches had positive total returns in June. JP Morgan estimated returns for June were 0.81%(AAA), 1.02% (AA), 1.07% (A), 1.84% (BBB), 2.32% (BB), and1.78% (B). The CS Leveraged Loan Index returned 2.24% in June. Loans posted their second highest return in the last 12-months, which was supported by a pause in Federal Reserve rate hikes, an upwardly revised 1Q23 GDP print and cooling inflation. With a U.S. economy that continued to surprise to the upside, despite numerous looming headwinds, CLO debt across the capital stack has exhibited strong returns year-to-date. Relative to fixed-rate corporate credit peers, which have been impacted by significant interest rate volatility, CLOs debt tranches rated AA-B have outperformed investment-grade and high-yield bonds at each credit quality rating.
This information is presented for informational purposes only. This is not to be construed as an offer to buy or sell any financial instruments and should not be relied upon as the sole investment making decision. All material is compiled from sources believed to be reliable, but accuracy cannot be guaranteed. The opinions expressed herein are based on current market conditions and are subject to change without notice.