Collateralized Loan Obligations (CLO)

What are Collateralized Loan Obligations (CLO)?

Collateralized loan obligations (CLO) are securities that are backed by a pool of loans. In other words, CLOs are repackaged loans that are sold to investors. They are similar to a collateralized mortgage obligation (CMO), except that the underlying instruments are loans instead of mortgages.

Understanding Collateralized Loan Obligations

With a collateralized loan obligation, debt payments from the underlying loans are pooled together and distributed to investors of various tranches in the CLO. 

Volta Finance Ltd (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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