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June 27, 2022

April & May 2022

In this edition of the Lakemore Insights – April & May 2022 report, we consider the impact of rising rates, as well as the risk of stagflation and recession on the CLO and Leveraged Loan markets. As asset prices decline and spreads widen, we analyze how market dislocations have the potential to enhance CLO equity IRRs by as much as 5%. We have also conducted analysis into the following Specialized Topics: ‘Scenario Analysis of New Issue CLO Equity IRRs in Dislocated and Recessionary Markets’; ‘Why Invest in Primary New Issue CLO Equity vs. Secondary CLO Equity?’; ‘Historical Performance of CLO Equity vs. Other Alternatives During a Recession’; and ‘Leveraged Loan Default Outlook Amid Rising Rates and Potential Stagflation’.