Collateralized loan obligation equity stands to gain as much as 15% this year, according to Tetragon Credit Partners. “It’s teens returns, high current cash flows and diversification,” said Dagmara Michalczuk, co-chief investment officer at the firm, which specializes in the riskiest part of the CLO market. “We are in vanilla corporate America, just using a little bit of leverage in financial engineering to generate those returns,” she tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Mike Campellone in the latest Credit Edge podcast. Michalczuk and Campellone also discuss the risk of loss from liability-management exercises, private debt valuations, loan defaults and relative value in European CLOs.

<p>Collateralized loan obligation equity stands to gain as much as 15% this year, according to Tetragon Credit Partners. &ldquo;It&rsquo;s teens returns, high current cash flows and diversification,&rdquo; said Dagmara Michalczuk, co-chief investment officer at the firm, which specializes in the riskiest part of the CLO market. &ldquo;We are in vanilla corporate America, just using a little bit of leverage in financial engineering to generate those returns,&rdquo; she tells Bloomberg News&rsquo; James Crombie and Bloomberg Intelligence&rsquo;s Mike Campellone in the latest Credit Edge podcast. Michalczuk and Campellone also discuss the risk of loss from liability-management exercises, private debt valuations, loan defaults and relative value in European CLOs.</p>

The Credit Edge reviews the top credit news of the week and looks at the week ahead, with in-depth research of the most important corporate sectors, trends and themes. Analysis of specific corporate bonds and credit default swaps is backed by Bloomberg Intelligence's robust data sets and indexes.

<p>The Credit Edge reviews the top credit news of the week and looks at the week ahead, with in-depth research of the most important corporate sectors, trends and themes. Analysis of specific corporate bonds and credit default swaps is backed by Bloomberg Intelligence's robust data sets and indexes.</p>

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Tetragon Sees Midteens Gain in Riskiest CLO Tranche

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/49cdbbe6-4923-4abf-8fc9-b3400149282d/transcript