CLO Collateral Loan Obligations
Collateralized Loan Obligations are collateralized corporate loans that are pooled into a securitization and divided into rated tranches. This creates a highly granular and diversified investment opportunity. The rating spectrum ranges from AAA to NR (Not Rated).
HAIC I is our first registered bond based on Collateralized Loan Obligations. We have launched this registered bond with a term of 10 years in November 2016. The registered bond has been awarded a BBB rating by the rating agency Scope. There will be an annual coupon of 2.60% p.a. and additional surplus participation as well as the opportunity to participate in rising interest rates. In addition, we are building up a reserve account that can increase to up to 5% of the issue volume by the end of the term.
A coupon in the traditional sense is the portion of a security that entitles you to redeem the dividend. Today, the coupon is synonymous with the nominal interest rate of a security, i. If the coupon is 3.5%, the interest is paid on a pro rata basis of 3.5% interest on the nominal amount.
What are Collateralized Loan Obligations?
Infinigon explains CLOs simple and easy.