Morgan Stanley in Talks to Acquire CLO Assets of Assurant
Morgan Stanley’s spokesperson declined to comment on the matter as the talks are private and representatives of Assurant did not respond to requests for comment.Notably, the coronavirus outbreak in mid-March shook the market for CLO issuance. As uncertainties regarding the impact of the virus on financials increased, the prices on underlying debt plunged to their lowest levels in March.However, before the outbreak of the virus, the CLO market flourished, stimulated by investors, who were deprived of yield by years of low interest rates.Notably, the fair value of Assurant’s CLO notes as of Mar 31, 2020, was $1.6 billion and Morgan Stanley will likely pay a fraction of the amount to get the rights to manage the CLO assets.Like Goldman Sachs GS, Morgan Stanley showed a keen interest in CLO sales in 2019. Near-zero interest rates and elevated expenses are major near-term concerns for the company.So far this year, shares of Morgan Stanley lost 8.2% compared with a decline of 13.1% recorded by the industry. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.A better-ranked stock from the same space is GAIN Capital Holdings GCAP. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies.