We can say CLO is a loan fund that uses investors’ money to buy business loans. In simple words, we can say that a CLO manager purchases the corporate loans made by the financial institutions. These loans are largely to the companies that have a lower than investment grade rating (BB+ or lower).
However, these loans are usually senior secured loans and get priority on the cash flow of the company. Also, these are collateralized loans against assets or inventory. So, these loans serve as collateral and offer a reliable revenue stream for the investors.
Volta Finance Limited (LON:VTA) is a closed-ended limited liability company registered in Guernsey. Volta’s investment objectives are to seek to preserve capital across the credit cycle and to provide a stable stream of income to its Shareholders through dividends that it expects to distribute on a quarterly basis.
