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Inflation question could push investors to floating rate CLO paper

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By Paola Aurisicchio
17 May 2021

Some CLO sources expect increased fears about inflation to enhance demand for CLO liabilities, as investors seek floating rate instruments. But other sources see the market taking a pause as investors assess the broader impact of inflation on fixed income and on relative value with corporate bonds. Sustained inflation could also hurt corporate profitability, and therefore the credit quality of CLO obligors.

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By Paola Aurisicchio
17 May 2021