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08 December 2023 Credit | Economics & Growth

Ep. 193: Shiloh Bates on Demystifying CLO Myths

Bilal Hafeez

Shiloh Bates is the Chief Investment Officer of Flat Rock Global in 2018 – a $750mn credit manager. Prior to joining Flat Rock Global, Shiloh was a Managing Director at Benefit Street Partners, and Head of Structured Products at BDCA Advisor. During his 20-year career, Shiloh has worked for several CLO managers and invested over $1.5 billion in CLO securities. He is the author of the recently published ‘CLO Investing – With an Emphasis on CLO Equity & BB Notes’. This week’s podcast covers:

What is a CLO?
Characteristics of the riskiest tranches – BB and equity.
Diversification vs liquidity.
How default rates on CLOs compare to corporate bonds.
Who issues, creates, and buys CLOs? The role of private equity.
How issuance evolved since 2021.
How CLOs behaved around crisis events (global financial crisis, COVID).
CLOs vs CDOs.
Self-healing properties of CLOs.
What scenarios do CLOs struggle most in?
CLO outperformance vs equities and outlook.
Books: Liar’s Poker (Lewis), The Smartest Guys in the Room (McLean, Elkind), When Genius Failed (Lowenstein).

You can find Shiloh’s book on CLO Investing here and you can get Shiloh’s market insights here.

Make sure to subscribe to the show on Apple, Spotify, YouTube, or wherever you go for your podcasts. You can follow us on Twitter and LinkedIn.

(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)

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