--Amanda Santamaria
Brit Stickney, managing director for the income and growth team at Allianz Global Investors Capital, is optimistic about investment opportunities in new issue collateralized loan obligations. He said CLOs have remained attractive because they faired better than other asset-backed securities in the economic downturn. “The CLO asset class has proven that it works—these deals look better coming out on the other side.”
Through Nicholas-Applegate Capital Management, an Allianz Global Investors Capital affiliate, Stickney invests in CLOs and a broad range of corporate credit including high-yield bonds, convertibles, and loans (TS, 7/09).
A big part of CLOs’ success is because the structure has proven reliable and the risk is obvious, Stickney said. “The main risks in CLOs’ defaults are identifiable, and abating.” That has Stickney eyeing low-levered-styled CLOs as an asset class. “The cost of funding is coming down from the highs [in the past year], asset spreads are high, and defaults are coming....