As I stated in my most recent OXLC article, CLOs will continue to face headwinds over the next coming quarters from raising default rates. I also noted that defaults would start impacting other industries other than Oil & Gas and Mining & Natural Resources. In the recent Fitch article (see below), defaults and credit downgrades in the Consumer sector are starting to be an issue. CLOs on average hold 7.5% of Consumer related credits compared to only 4.5% of Energy and Mining related credits.
Fitch Reports That Leverage Loan Defaults Are Starting To Impact The Retail Sector
Analyst's Disclosure: I am/we are long OXLC, ECC AND ACSF.
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