Korea Investment & Securities (KIS) announced on May. 22 that it has established a collaborative relationship with Anchorage Capital to expand its Collateralized Loan Obligation (CLO) business.
KIS’s New York branch, KIS US, has committed to investing in Anchorage Capital’s credit fund. This fund invests in structured products based on financial loans such as CLOs and leveraged loans.
A CLO is a structured product that aggregates leveraged loans from companies with varying credit ratings and issues securities based on the cash flow generated from these loans. By pooling 200-300 leveraged loans, the risk is reduced, resulting in lower default rates compared to other corporate debts and structured products.
Previously, KIS partnered with Carlyle Group, one of the world’s largest private equity firms, to launch CLO products three times, making these products accessible to S. Korean individual investors who previously had limited access.
The newly partnered Anchorage Capital also manages $23 billion in structured credit assets, including CLOs, and is expected to supply a wider variety of global structured products to the domestic retail market.
A KIS representative stated, “The collaboration with Anchorage Capital will be an excellent opportunity to expand our business in the CLO market, where domestic financial institutions have limited participation. We will continue to introduce acquisition finance deals with attractive interest rates and stability to the domestic market.”
Yale Baron, Co-Chief Investment Officer of Anchorage Capital, commented, “We will actively support KIS in expanding its influence in the U.S. leveraged credit market and seizing various structured deal opportunities.”
