The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 8 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 0 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Majewski: CLO AAA and AA securities have zero historical impairments
“There's never been an impairment in the history of the CLO market on a AAA or AA security issued.”
Majewski: 96% of pre-crisis CLO equity returned positive with 15% median IRR
“96% of CLOs had a positive return to the equity class from before the financial crisis with a median of 15 IRR, outperforming private equity, outperforming the S&P 500 even.”
Majewski: Long-term default rate on BB CLO debt is under 20 bps annually
“In my opinion, you take very little credit risk buying CLO debt, even at the double B level, the class just above the equity, the longterm default rate is less than 20 basis points per annum.”
Majewski: CLO collateral managers cannot be removed absent gross negligence
“Absent capital C cause gross negligence, you can't remove a collateral manager. You can always sell your security. By and large, the vast majority of CLOs Have these ironclad contracts, which in a private equity fund or a hedge fund would not be tolerated.”
Majewski: BDC debt outperformed BDC equity on an index basis from 2014 to 2019
“BDC debt outperformed BDC equity from 20 14 to 20 19. Even though there weren't a lot of credit problems then, just the yield opportunity was so great, it outperformed on an index basis the equity.”
Majewski: 12% of loans paid off at par annually in 2008–2009
“And even in 2008 and nine, on average, 12% of loans paid off at par each year.”
Majewski: Leveraged loan index delivered positive returns in 28 of 30 years
“The Credit Suisse Leverage Loan Index is sort of the S&P 500 of the loan market, and it's had a positive return for 28 of the last 30 years.”
Majewski: Eagle Point will see a down 10%+ month in five years
“In the next five years, we're going to have a down 10% plus month. I don't know when. I don't know why. I know it's going to happen, and if that's not something you're comfortable with, this is probably not the right investment for you.”