tag:blogger.com,1999:blog-6321089372587128676.post1006098761566374672..comments2023-10-17T10:01:00.917-04:00Comments on Distressed Debt Investing: The Catch 22 about CLOsUnknownnoreply@blogger.comBlogger3125tag:blogger.com,1999:blog-6321089372587128676.post-25610167141312816112012-10-04T08:27:31.361-04:002012-10-04T08:27:31.361-04:00On your point re: distressed funds stepping and TR...On your point re: distressed funds stepping and TRS, back of the envelope math with 70% advance rate (~3.3x levered) and L+125 cost of funding (both in-line with current market) give you a ~20% return buying L+500 assets @80 assuming 3 year pull-to-par. Not the kind of returns credit funds were getting in '09 to be sure but not so shabby.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6321089372587128676.post-73826929898673104622012-10-04T01:29:20.033-04:002012-10-04T01:29:20.033-04:00Sounds great! And good points at the end; it reall...Sounds great! And good points at the end; it really is a distinct, separate Blog.<br /> We sincerely appreciate it.Stocks to buy nowhttp://www.myrollingstocks.com/noreply@blogger.comtag:blogger.com,1999:blog-6321089372587128676.post-56079705982188676482012-10-01T23:51:45.900-04:002012-10-01T23:51:45.900-04:00A) CLO issue volumes are still below the peak and ...A) CLO issue volumes are still below the peak and 06/07 deals are starting to end reinvestment meaning total CLO AUM is likely still going to decline before it is stabilized with new issue<br /><br />B) A big driver of the severity of loan price decline during the previous cycle was the liquidation of market value CLOs/TRS lines, which i) generally not accounted for in the 06/07 CLO issuance data and ii) were subject to mark-to-market margin calls that forced structures to liquidate triggering further liquidations.Anonymousnoreply@blogger.com