Current Structured Finance/Stressed and Distressed Special Situations Credit Opportunities

On distressed - I think there are some other threads on WSO on this so I won't spent time here. Lots of good resources on the internet as well.

On CLOs - this is a tricky one for idea generation. As a graduate, I think it's tough to form a view on why you think one CLO's debt/equity is any better than another's without having access to management, their investment strategy, & portfolio-level analytics.

On ABS - this is easier to form a view on in my opinion. Here's how: 1) Put together a list of assets that are commonly securitized - i.e. aircraft, containers, mortgages, consumer credit (the big credit rating agencies put together reports on recent securitizations which you should be able to find for on their websites after making a free account) 2) Form a view on the sturdiness/longevity of those assets & their ability to produce cash flow - i.e. lots of airlines are distressed right now & will be unable to pay the rent on the aircraft they lease from aircraft lessors (which are frequently securitized) so clearly aircraft ABS will be affected. Question is: by how much & for how long? Do lots of research here & really try to understand the quality of the assets - i.e. for consumer credit, what's the weighted-average credit score of the portfolio? What are the odds people don't pay their mortgages? Etc. 3) Form a view on how sturdy the structure of the ABS is. Read the rating agency reports on the securitizations & make a note of their structure - what's the loan-to-value ratio, what does credit enhancement look like (google this if you want to understand how credit enhancement is done)? Are there good management teams managing the assets? Etc. 4) Determine which level of seniority in the ABS you like the most - i.e. you believe aircraft will lose value & airlines will stop paying their rent & that will affect aircraft ABS, but given your understanding of the ABS structure, you think it's unlikely that the most senior tranches of the aircraft ABS you like will be impaired (perhaps the more junior tranches will be wiped out). This is tough to quantify but it's possible those senior tranches may be mis-priced if that's the case (investors may think they'll be impaired & senior tranche spreads widen) 5) Voila, you have formed a thesis on all the pertinent parts of an ABS: the assets, their ability to produce cash flow, the ABS structure in general, the "relative value" within the ABS structure, & the extent to which other investors do or do not share your view.

Hope this helps!