RE: Factsheet23 Feb 2023 19:05
kentio; yes of all the CLOs, BGLF, all things considered, is my favourite. They are currently extremely bullish, and could pay a dividend considerably in excess of the 10% they do. It is the one CLO that has considerable and wide institutional share ownership. If you are thinking of buying your first CLO stock, it would be the one, as it was for me 5 years ago.
Scandiexpat; the illiquidity and spread here, as with most CLOs is a problem. I've found you have to place an order and sometimes wait a week before it gets executed. Obviously if you needed to exit quickly, that's a major problem with such liquidity, hence my advocating that you need to be prepared to invest and forget about for 5 years..The flip of that illiquidity is that when stocks dropped sharply at the end of last year, this barely moved.
Gavster NBC; i think a lot of these CLOs are continually undervalued, but it is that cushion that reassures me. TOROs factsheet did highlight profitable trading of BB rated loans, that they bought in 4q opportunistically and have subsequently sold, which is probably the cause of the NAV uplift and a growing confidence in the CLO market generally, also highlighted d by BGLF and Morningstar coverage of this arena (which is excellent, link below). I have found both NAVs and SPs rising recently (alas I'm not seeing such in my mainstream stocks!), aided by this more positive sentiment (of a soft recessionary landing) generally, and Co specific pronouncements (BGLF bullish and consulting holders on what to do with NAV discount beyond buybacks, FAIR buying back whilst reassuring fixed 8c divvy easily covered, and TORO demonstrating trading agility with it's BB transactions and NAV uplift).
Generally, as well as holding for 5 years, I do think you need to take a stance on share ownership. Whilst BGLF is widespread across well known institutions, others like TORO are held by a myriad of anonymous companies which might concern some, so to some extent you can't be sure whose interests are being considered. I've basically took the view that these unknown, always offshore domiciled limited cos, are basically high net worth individuals wanting the same as you and me, high fixed yield, to forget about, and I'm happy to ride on their coat tails.
TORO specifically; they are very much Europe predominated, which is actually the strongest market currently, whereas most of the CLOs are US dominated, and I value (within this arena) that diversity. They are sitting on £17mill in cash which covers the next year's divvy, but I do wonder what there considerations are to reduce/realise the NAV discount, on which they have long been silent.
https://indexes.morningstar.com/insights/index-ip/blt450367154896e3f7/leveraged-loans-liftoff
Sign In
Follow the stocks
