Jul
22
Pension Funds Hunting Yield Return to Bonds Tied to Risky Loans
ByPension funds seeking higher returns as global central banks suppress interest rates have stepped up their purchases of securities that bundle high-risk corporate loans.
The funds acquired about 8 percent of the top-rated U.S. collateralized loan obligation notes issued in the first half of this year and 7 percent of the riskier mezzanine slices of the deals, according to Citigroup Inc. data. That compares with “minimal” amounts a few years ago.
“Yield-starved pension funds have made an arrival into the CLO space and seem to be here for the loan haul,” Citigroup analysts including Ratul Roy and Maggie Wang wrote in a report Tuesday…
Pension Funds Hunting Yield Return to Bonds Tied to Risky Loans
