Managing Credit Risk in the Underlying CLO Portfolio

Managing Credit Risk in the Underlying CLO Portfolio

In Ian's series on CLOs, he will discuss the risks and valuation of these products. This video will cover the assessment of credit risks when deciding whether to purchase a bond. It will also consider what he terms "manager risk", which is the way in which manager actions can affect the risks and value of a bond.
Overview

Investors of CLOs are paid a percentage of the value increase in their portfolios, and thus, it is of great importance that they evaluate and manage the fundamental credit risks before purchasing, trading out of, or holding on to bonds.

Key learning objectives:

  • Identify all the inherent credit assessment checks/tests

  • Explain the importance of hedging and diversification in portfolio management

  • Define manager risk, and outline the key questions to ask a collateral manager

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Summary
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Expert
Ian Robinson

Ian Robinson

Ian started work in the securitisation market in the late 1990’s after finishing his PhD in Law. He split his time in the market between structuring transactions and investing in them. Ian now works as a consultant, advising Financial Institutions and Government bodies on all aspects of structuring, trading and the structured credit markets.

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