Latest news with #CLOs
CNA
22-05-2025
- Business
- CNA
Japan's Norinchukin Bank books annual loss of $12.63 billion
TOKYO :Japan's Norinchukin Bank recorded a net loss of 1.81 trillion yen ($12.63 billion) for the January-March quarter as it sold off its portfolio of foreign government bonds, it announced on Thursday. The loss compared with a forecast net loss of approximately 1.9 trillion yen. Over the past year Norinchukin has been forced to realise losses on its enormous portfolio of foreign sovereign bonds. These bonds plummeted in value when interest rates in the U.S. and Europe began to rise from 2022 and remained higher for longer than anticipated. Norinchukin still had 1.2 trillion yen of unrealised losses on its bond portfolio at the end of March, down from 2.93 trillion yen at the end of September 2023. The bank, which is the principal financial institution for Japan's farm, forestry and fishery cooperatives, has a business model centred on securities investments rather than generating income from lending. As such it has not profited from the rise in domestic interest rates that has been a boon for the banking sector. Japan's three largest banking groups posted record annual profits last week. During the years of negative interest rates Norinchukin bought masses of foreign government bonds in search of higher returns. It has also become one of the world's largest investors in collateralised loan obligations (CLOs) in recent years and held 8.3 trillion yen worth of the securities at the end of March. Norinchukin had 40.3 trillion yen in market assets at the end of March, down from 59.5 trillion yen at the end of March 2022. ($1 = 143.3400 yen)
Wall Street Journal
18-05-2025
- Business
- Wall Street Journal
Private-Credit Ratings Under Scrutiny: Conflicting Interests Fuel Investor Concerns
Ratings that grade private-credit products and are used by investors to categorize debt issued by lending firms are increasingly being called into question by industry decision makers. Credit firms that bundle packages of loans to back securities like collateralized loan obligations, or CLOs, are often able to choose the ratings provider for such issues. Critics say this can lead to conflicts of interest, as the issuer pays fees to the ratings provider while the resulting grades can significantly affect the marketability of the rated securities.
Japan Times
14-05-2025
- Business
- Japan Times
Japan's biggest insurer weighs riskier overseas CLO investments
Japan's biggest life insurer is considering taking on a little more risk with its investments in collateralized loan obligations (CLOs), as it looks for ways to eke out better returns abroad. Nippon Life Insurance last year joined other Japanese institutions that are buying CLOs — financial products made up of leveraged corporate loans — to diversify investments. They have typically focused on the highest-rated notes, which are seen as the least risky but offer lower returns. "There could be a situation where we cannot secure enough spreads with the triple A-rated tranche,' Nippon Life Chief Investment Officer Keisuke Kawasaki said in an interview. "If that happens, we're thinking about enhancing the yields by including some double A-rated ones.' CLOs are attractive to Japanese investors such as Nippon Life and Norinchukin Bank because their interest payments move in line with fluctuations in benchmark rates. Such floating-rate products can absorb the costs of hedging against currency risk better than foreign bonds. With most insurance payouts denominated in yen, Japanese insurers hedge part of their foreign-currency investments against exchange-rate swings. But they were forced to sell hedged foreign bonds after protection costs surged in 2022, when the Federal Reserve launched aggressive rate hikes. Nippon Life has ¥78 trillion ($527 billion) in its general account of investments that it manages to meet obligations for policyholders and other clients. At the end of March, foreign bonds accounted for about 10% of the portfolio and half of them were with currency hedging. The company doesn't disclose the amount of its CLO holdings. Kawasaki said other floating-rate products it has include infrastructure and real estate debt. It's a tricky time for Japanese insurers to invest, with U.S. President Donald Trump's trade war fueling global market volatility and reducing the appeal of Treasurys. At home, yields have climbed as the Bank of Japan raises interest rates to normalize monetary policy. More recently, super-long Japanese government bonds (JGBs) have been sold off, pushing yields on the 30-year note to the highest since 2000. In a twice-a-year asset allocation briefing last month, Nippon Life said it plans to reduce its holdings of the nation's sovereign bonds. Kawasaki clarified its stance to say that current yields are "attractive.' Nippon Life has been replacing lower-yielding JGBs with higher-yielding notes since last year, given rising domestic rates. The insurer has said it sold about ¥2 trillion worth of domestic bonds in the year ended in March, booking a loss of ¥320 billion in the process. Kawasaki said Nippon Life is looking for investment beyond Treasurys, such as sovereign bonds in Europe and Australia. "We want to seek opportunities in various places,' he said. "We've been diversifying, and I have a fresh appreciation of the importance of that in this highly uncertain environment.'
Globe and Mail
01-04-2025
- Business
- Globe and Mail
XAI Octagon Floating Rate & Alternative Income Trust Declares its Monthly Common Shares Distribution of $0.077 per Share
CHICAGO, April 01, 2025 (GLOBE NEWSWIRE) -- XAI Octagon Floating Rate & Alternative Income Trust (the 'Trust') has declared its regular monthly distribution of $0.077 per share on the Trust's common shares (NYSE: XFLT), payable on May 1, 2025, to common shareholders of record as of April 15, 2025, as noted below. The amount of the distribution represents no change from the previous month's distribution amount of $0.077 per share. The following dates apply to the declaration: Common share distributions may be paid from net investment income (regular interest and dividends), capital gains and/or a return of capital. The specific tax characteristics of the distributions will be reported to the Trust's common shareholders on Form 1099 after the end of the 2025 calendar year. Shareholders should not assume that the source of a distribution from the Trust is net income or profit. For further information regarding the Trust's distributions, please visit The Trust's net investment income and capital gain can vary significantly over time; however, the Trust seeks to maintain more stable common share monthly distributions over time. The Trust's investments in CLOs are subject to complex tax rules and the calculation of taxable income attributed to an investment in CLO subordinated notes can be dramatically different from the calculation of income for financial reporting purposes under accounting principles generally accepted in the United States ('U.S. GAAP'), and, as a result, there may be significant differences between the Trust's GAAP income and its taxable income. The Trust's final taxable income for the current fiscal year will not be known until the Trust's tax returns are filed. As a registered investment company, the Trust is subject to a 4% excise tax that is imposed if the Trust does not distribute to common shareholders by the end of any calendar year at least the sum of (i) 98% of its ordinary income (not taking into account any capital gain or loss) for the calendar year and (ii) 98.2% of its capital gain in excess of its capital loss (adjusted for certain ordinary losses) for a one-year period generally ending on October 31 of the calendar year (unless an election is made to use the Trust's fiscal year). In certain circumstances, the Trust may elect to retain income or capital gain to the extent that the Board of Trustees, in consultation with Trust management, determines it to be in the interest of shareholders to do so. The common share distributions paid by the Trust for any particular period may be more than the amount of net investment income from that period. As a result, all or a portion of a distribution may be a return of capital, which is in effect a partial return of the amount a common shareholder invested in the Trust, up to the amount of the common shareholder's tax basis in their common shares, which would reduce such tax basis. Although a return of capital may not be taxable, it will generally increase the common shareholder's potential gain, or reduce the common shareholder's potential loss, on any subsequent sale or other disposition of common shares. The distribution shall be paid on the Payment Date unless the payment of such distribution is deferred by the Board of Trustees upon a determination that such deferral is required in order to comply with applicable law to ensure that the Trust remains solvent and able to pay its debts as they become due and continue as a going concern, or to comply with the applicable terms or financial covenants of the Trust's senior securities. Future common share distributions will be made if and when declared by the Trust's Board of Trustees, based on a consideration of number of factors, including the Trust's continued compliance with terms and financial covenants of its senior securities, the Trust's net investment income, financial performance and available cash. There can be no assurance that the amount or timing of common share distributions in the future will be equal or similar to that described herein or that the Board of Trustees will not decide to suspend or discontinue the payment of common share distributions in the future. The investment objective of the Trust is to seek attractive total return with an emphasis on income generation across multiple stages of the credit cycle. The Trust seeks to achieve its investment objective by investing in a dynamically managed portfolio of opportunities primarily within the private credit markets. Under normal market conditions, the Trust will invest at least 80% of its Managed Assets in floating rate credit instruments and other structured credit investments. There can be no assurance that the Trust will achieve its investment objective. The Trust's common shares are traded on the New York Stock Exchange under the symbol 'XFLT,' and the Trust's 6.50% Series 2026 Term Preferred Shares are traded on the New York Stock Exchange under the symbol 'XFLTPRA'. About XA Investments XA Investments LLC ('XAI') serves as the Trust's investment adviser. XAI is a Chicago-based firm founded by XMS Capital Partners in 2016. XAI serves as the investment adviser for two listed closed-end funds and an interval closed-end fund. The listed closed-end funds, the XAI Octagon Floating Rate & Alternative Income Trust (NYSE: XFLT) and XAI Madison Equity Premium Income Fund (NYSE: MCN) both trade on the New York Stock Exchange. The interval closed-end fund, Octagon XAI CLO Income Fund (OCTIX), is newly launched and has been made widely available to investors. In addition to investment advisory services, the firm also provides investment fund structuring and consulting services focused on registered closed-end funds to meet institutional client needs. XAI offers custom product build and consulting services, including development and market research, sales, marketing, fund management. XAI believes that the investing public can benefit from new vehicles to access a broad range of alternative investment strategies and managers. XAI provides individual investors with access to institutional-caliber alternative managers. For more information, please visit About XMS Capital Partners XMS Capital Partners, LLC, established in 2006, is a global, independent, financial services firm providing M&A, corporate advisory and asset management services to clients. It has offices in Chicago, Boston and London. For more information, please visit About Octagon Credit Investors Octagon Credit Investors, LLC ('Octagon') serves as the Trust's investment sub-adviser. Octagon is a 25+ year old, $33.2B below-investment grade corporate credit investment adviser focused on leveraged loan, high yield bond and structured credit (CLO debt and equity) investments. Through fundamental credit analysis and active portfolio management, Octagon's investment team identifies attractive relative value opportunities across below-investment grade asset classes, sectors and issuers. Octagon's investment philosophy and methodology encourage and rely upon dynamic internal communication to manage portfolio risk. Over its history, the firm has applied a disciplined, repeatable and scalable approach in its effort to generate attractive risk-adjusted returns for its investors. For more information, please visit XAI does not provide tax advice; please consult a professional tax advisor regarding your specific tax situation. Income may be subject to state and local taxes, as well as the federal alternative minimum tax. Investors should consider the investment objectives and policies, risk considerations, charges and expenses of the Trust carefully before investing. For more information on the Trust, please visit the Trust's webpage at This press release shall not constitute an offer to sell or a solicitation to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer or solicitation or sale would be unlawful prior to registration or qualification under the laws of such state or jurisdiction. Paralel Distributors, LLC - Distributor Media Contact: Kimberly Flynn, President XA Investments LLC Phone: 888-903-3358 Email: KFlynn@
Yahoo
26-03-2025
- Business
- Yahoo
New York Life Prices Company's First CLO Transaction of 2025
Transaction follows company-record CLO volume in 2024 which brought six CLO deals to market as an active issuer investing in CLO debt tranches across the capital structure NEW YORK, March 26, 2025--(BUSINESS WIRE)--New York Life today announced the company's first collateralized loan obligation (CLO) transaction of 2025, Flatiron CLO 30 Ltd., a new CLO issuance. The transaction follows a company-record CLO volume last year. Having first entered the CLO market in 2001 to generate an additional source of returns for the company's policy owners, New York Life's historic 2024 brought six deals to market including four new issuances and two reset transactions for existing portfolios. The team also achieved a company-record year investing in CLO debt tranches across the capital structure, which grew its CLO tranche portfolio to almost $10 billion. Attractive relative value, spreads and all-in-yields contributed to a 35-percent increase in CLO investments in 2024 over its previous annual high. "At the start of last year, we identified the favorable market conditions that continue today and seized the opportunity to accelerate our efforts both as an active issuer and an investor of CLOs," said Chris Saltaformaggio, senior director with New York Life Investors, the team that manages over $300 billion across public and private assets for New York Life's General Account and third-party investors around the globe. "Last year's achievements parallel a broader trend of growth in the CLO industry and reflect the expertise and dedication of our team as we pursue these strategic investments." New York Life's CLO transactions involve investments from the company's General Account as well as strategic partnerships with third-party investors drawn to the team's experienced research managers with proven track records and demonstrated ability to navigate complex market environments and capabilities in both new CLO issuance and CLO debt investing. New York Life's six CLO transactions in 2024 are listed below. New Issuances Flatiron CLO 25 Ltd. Flatiron CLO 26 Ltd. Flatiron RR CLO 27 Ltd. Flatiron RR CLO 28 Ltd. Reset Transactions Flatiron CLO 20 Ltd. Flatiron CLO 21 Ltd. "Following a watershed year for our CLO business in 2024, we entered this year optimistic about the potential for continued growth in the CLO space," said Beth Standbridge, managing director with New York Life Investors. "Having just recently priced our first transaction of 2025, our focus remains on delivering value to New York Life's policy owners." ABOUT NEW YORK LIFE New York Life Insurance Company ( a Fortune 100 company founded in 1845, is the largest1 mutual life insurance company in the United States and one of the largest life insurers in the world. With headquarters in New York City, New York Life's family of companies offers life insurance, and other solutions. New York Life has the highest financial strength ratings currently awarded to any U.S. life insurer from all four of the major credit rating agencies.2 1Based on revenue as reported by "Fortune 500 ranked within Industries, Insurance: Life, Health (Mutual)," Fortune magazine, 6/4/2024. For methodology, please see 2Individual independent rating agency commentary as of 10/4/2024: A.M. Best (A++), Fitch (AAA), Moody's Investors Service (Aaa), Standard & Poor's (AA+). View source version on Contacts Kevin MaherNew York Life (212) 576-6955 kevin_b_maher@
