Risk may be rising in leveraged loans and spreads are certainly contracting, but collateralized loan obligation managers are still finding plenty of interest. Deals for American Express Asset Management, American Money Management, Ares Management,Black Diamond Capital Management and Octagon Credit Investors, are currently being marketed.
CLOs offer exposure to a broad spectrum of credit sectors versus other CDO products and makes sense as a diversification tool even without large spread pickups, said one analyst in a report. The analyst is also positive on fundamentals. More risk is creeping in, but this is not excessive. Cash flow multiples look positive and while equity contributions are falling they are well within historical standards, he added.