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Treading Carefully: Risk and Opportunity in CLOs and Bank Loans
by Beth Maclean, Giang Bui, Sabeen Firozali of PIMCO, 12/9/19

While many risk assets have rallied in 2019, the lower-rated tranches of collateralized loan obligations (CLOs) have weakened. Is this a sign that the credit cycle is turning?

High Yield and Bank Loans: A Tale of Two Markets
by Hozef Arif, Beth Maclean, Sabeen Firozali of PIMCO, 12/17/18

Recent fundamental changes in the leveraged finance markets mean that actively managing credit exposure is more important than ever.

Leveraging Opportunities in Bank Loans to Enhance Return Potential
by Beth MacLean of PIMCO, 11/17/16

With low interest rates across global markets, a number of investors are turning to credit assets to enhance returns.

Got Loans?
by Mark R. Kiesel, Elizabeth (Beth) MacLean, Rudy Pimentel of PIMCO, 10/30/14
?We believe select investors looking to reposition portfolios may benefit from a move to senior secured floating rate loans. CLOs have been an important source of demand in the market, and even with more strict risk retention rules just announced under Dodd Frank, we think demand will remain strong. While the Fed has criticized some banks for not following their leveraged lending guidelines, Fed members themselves, in our view, do not appear concerned about loans having a major impact on financial stability.

Warning Signs in Leveraged Credit?
by Elizabeth (Beth) MacLean of PIMCO, 4/4/14
Though leveraged credit markets are less levered than they were pre-crisis, signs of more lenient, issuer-friendly terms are prompting regulators (including the Fed) and investors to voice concerns. Regulators have tightened lending guidelines, but strong demand versus supply means the market is able to find ways around such guidance. Detailed bottom-up credit analysis with an emphasis on long-term fundamentals and loss avoidance remains crucial to investing in leveraged credit today.

Leveraged Finance Outlook: Riding the Low Default Wave
by Andrew R. Jessop, Elizabeth (Beth) MacLean of PIMCO, 2/11/14
Following strong performance in 2013, we expect low (1%-3%) defaults in leveraged finance markets this year. Issuance should remain healthy, and continued slow but steady growth in the U.S. economy should offer further stability to these companies. However, careful credit selection and monitoring of sector trends remain imperative. Investors with low tolerance for volatility and more interest rate sensitivity may emphasize loans, while investors with greater risk tolerance and a more benign outlook for rates may look to high yield.

Taking Seniority: Looking to Bank Loans in Uncertain Markets
by Elizabeth (Beth) MacLean of PIMCO, 6/18/13
Bank loans are senior secured loans to non-investment-grade corporations. They are floating rate instruments, secured by the collateral of that company and senior in the capital structure. Bank loans can be a more defensive way for investors to move into the high yield space, due to the collateral and their senior position. While we have seen yield spreads tightening among loans, on a relative basis we do think loan valuations still look attractive. PIMCOs investment process helps us seek these attractive opportunities while managing risk.
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