May

Risky and Complex U.S. Loan Wagers Are Red Hot in Low-Yield Asia

Asian funds are snapping up collateralized loan obligations
Lower-rated CLO slices have outperformed, but some see risks

Asia’s yield-hungry investors have a lot riding on the financial engineers of Wall Street.

Faced with near record-low interest rates at home, money managers in Korea, Japan and China have been piling into complex and increasingly risky structured loan products in America. Their investments in collateralized loan obligations — including the high-yield “equity’’ tranches most exposed to defaults — have helped drive a doubling of issuance in 2017…

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Risky and Complex U.S. Loan Wagers Are Red Hot in Low-Yield Asia

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