Structured Products Capabilities
Highland was one of the early pioneers in the collateralized loan obligation (CLO) market, setting up one of the first non-bank CLO deals in 1996.
In addition to our expertise as a CLO manager, Highland has experience as a CLO investor, operating secondary CLO investment portfolios.
Highland’s CLO capabilities are integrated across the broader investment platform, which helps the firm provide clients with unique investment opportunities.
Structured Products Vehicles
Highland offers exposure to the CLO market through a range of vehicles, including: managed CLOs; separately managed accounts; and CLO funds.
CLO Investing Overview
A CLO is an issuance of securities (AAA to B) and an equity tranche backed by the cash flows from a diversified pool of senior secured corporate bank loans.
CLOs are structured with a re-investment period, allowing the CLO Manager to actively buy and sell assets, subject to asset quality covenants for a period of 3-5 years.
The return paid to the equity holders is the difference between the current yield on the underlying assets and the financing cost of the issued notes.