BlackRock Gives This Acronym a Try
Collateralized loan obligations are offering elusive yield.
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When people hear acronyms like CDO or CLO, they immediately think of the financial crisis that brought down Lehman Brothers and Bear Stearns.
And perhaps it's because of that impulse to recoil that firms such as BlackRock see opportunity in the securities. Even now, eight years after that epic credit seizure, collateralized loan obligations, or CLOs, are still treated with more skepticism than similarly rated high-yield bonds or loans. As a result, they offer higher yields.