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News

New Ignacio Sosa joins DoubleLine as Director of newly established Product Solutions Group
Click here for press release.

Week of June 30, 2014 - Collateralized Loan Obligations (CLOs)

As credit spreads continue to trade tighter across most fixed income markets, DoubleLine has been finding relative value in the Collateralized Loan Obligation (CLO) market. Recently, DoubleLine's Fixed Income Asset Allocation (FIAA) Committee agreed to increase the allocation to US CLOs. With US high grade corporate bonds tightening 30-40 basis points (bps) for most of 2013, longer duration (7 year) US CLO AAA-rated securities seem to offer a better relative value by providing investors 20-30 bps in excess spread in addition to being higher quality.

In addition to excess yield, new CLO 2.0 issues continue to look attractive as the underlying portfolio credit composition has improved over recent months. The CLOs purchased for some of the asset allocation strategies are primarily "floating rate" which helps minimize the interest rate risk in the portfolio while providing an attractive yield for investors.

Meanwhile, DoubleLine continues to monitor the regulatory environment surrounding the CLO market which began the year under pressure due to fear of the Volcker Rule. The Volcker Rule would restrict dealers from holding non-compliant CLO tranches which will likely lead to lower demand and issuance across the market. It appears that the likelihood of additional regulatory relief has diminished with regulatory action not expected sometime well into 2015 at the earliest. As market participants get comfortable with owning CLOs again, issuance has continued to pick up steam with $60 billion issued year-to-date (YTD) 2014. Market issuance is on pace for the highest primary volume on record and may have been a key factor to wider spreads in recent months.

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Archived Strategy News

New DoubleLine Videos

Articles & Video about DoubleLine

To view, please copy and paste the link into a new browser window.

Jeffrey Gundlach
8-15-14 CNBC "DoubleLine's Gundlach: Could see U.S. 10-year yields go to 2.2%"
Click here to view video
02-12-14 "Gundlach: QE will not end in 2014"
http://video.cnbc.com/gallery/?video=3000245159
02-12-14 "Gundlach: Market has discounted tapering" http://video.cnbc.com/gallery/?video=3000245506

Vincent Fiorillo
04-14-14 "Housing Finance Reform"
http://video.cnbc.com/gallery/?video=3000265427

Information presented was current as of the date the material was prepared by an outside party. DoubleLine assumes no duty to update this information.

Events

Click here for DoubleLine's 2014 Webcast Schedule

Tuesday, January 14, 2014 at 1:15 pm PT / 4:15 pm ET
Jeffrey Gundlach "Let the Race Begin! 2014 Markets: Year of the Horse"
Click Here for Replay
Click here for Webcast Recap (pdf)

Thursday, June 27, 2013 at 1:15 pm PDT / 4:15 pm EDT
Jeffrey Gundlach "What in the World is Going On?" (Redux)
Click here for replay
Click here for Webcast Recap (pdf)

Tuesday, January 8, 2013
Jeffrey Gundlach "2013 Market Outlook: Year of the Snake"
Click here for Webcast Recap (pdf)

Archive