In this edition of the Lakemore Insights – April 2021 report, we analyze senior loan new issues, historically high CLO equity arbitrage levels and the benefits of CLO equity vintage diversification, showing that investing in CLO equity on a five-year rolling basis increases median IRRs and reduces standard deviation of returns. We also examine CLO liability costs and offer our outlook for the direction of liability pricing in the coming months. Meanwhile, we note that primary loan issuance has improved in quality post pandemic, with loan spreads also wider than pre-Covid-19 levels, which should benefit CLO portfolios. Moreover, loan market default rates have fallen below their long-term historical average.