CLO managers snapping up discounted high-yield bonds
Holdings in European CLOs top 8% as managers push to increase caps on fixed-rate assets
Managers of collateralised loan obligations (CLOs) are buying fixed-rate bonds at knock-down prices as rising rates have caused prices to diverge from those of loans.
CLOs usually buy floating-rate broadly syndicated loans. This year, though, managers have made use of rules in CLO structures that allow them also to buy a limited number of bonds.
Ordinarily bonds and loans would trade at a
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