Examining CLO tiering opportunities

Black Swift Group CIO Greg Casals argues investors can take advantage of spread dispersion by looking beyond tier one CLO managers


Although many new issue CLO deals are similar in structure and portfolio composition, expected spreads over three-month Libor for debt tranches often differ based on the manager of the CLO – a phenomenon known as “manager tiering”. In this article, we examine manager tiering and highlight opportunities for diligent CLO