CLOs: How They Work

Collateralized loan obligations (CLOs) are attracting increasing attention as investors broaden their horizons in the search for yield. While CLOs offer above-average returns versus other fixed income strategies, some investors may be intimidated by their complexity. We’re here to help.

What is a CLO?

A CLO is a portfolio of leveraged loans that is securitized and managed as a fund. Each CLO is structured as a series of “tranches,” or groups of interest-paying bonds, along with a small portion of equity.

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.

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