Co-Head of Structured Credit, Melissa Ricco discusses the current state of the collateralized loan obligation (CLO) market. She provides insight into the year-to-date performance of the asset class, the current credit quality picture, and what risks the team is monitoring.
Melissa Ricco: If we think about the fundamentals, loan borrowers have had access to capital markets now for quite some time, and as such have strengthened their balance sheets, have lower leverage, have pushed out maturity, so I think we’re starting from a pretty good base. That being said, I think we could start to see idiosyncratic risk start to creep in. And so whether it’s from some of these things that we’ve been all talking about, inflationary pressures, are they able to pass on these cost to consumers. So there’s certain sectors that I think will be more impacted than others and therefore the active management individual credit selection is really going to be key.
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.