Correcting CCC confusion
02-Jun-25
The DESK
05-Jun-25
Correcting CCC confusion
02-Jun-25
The DESK
05-Jun-25
 

May 2025

Issue No. 4

The CLO Investor

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Barry Povey

Principal

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Busting the CLO CCC Myth

Whenever there is a period of macro volatility a predictable article tends to come out in the broader financial press. It typically goes along the lines of:

[insert negative macro event] is predicted to cause a spike in CCC loans in CLOs. This will cause them to breach their 7.5% limits and force the CLO managers to sell their CCC loans at distressed prices.

It’s an enticing premise – any forced selling of low-priced assets usually is – however, it’s incorrect as it’s just not how the CCC tests work in CLOs

Also, despite these articles, no AAA-rated CLO has ever defaulted in over 25 years (when rating agency data first started being collected).1 As we have mentioned before, this is a track record that covers multiple crises including the Global Financial Crisis, Eurozone crisis, and COVID. So why, despite these headlines, do AAA-rated CLOs have a clean track record of zero defaults and how do CCCs fit in?

CLOs are designed and have been tested to weather periods of market volatility. They’ve achieved this record, in part, because they are non-mark-to-market structures (there are no margin calls on CLO debt) and because of numerous tests built into the structure. These tests aim to ensure there is sufficient loan collateral to protect the CLO investors throughout the lifecycle of the deal. CLO debt notes are designed to be ‘over-collateralised’ – there are more assets (underlying loans) backing the note investment than is owed on that investment. Many people will be familiar with the example of a mortgage whereby a bank typically lends less than the property is worth. This provides the bank with a cushion to receive their money back in the event of a mortgage default as the property can decrease in value and still be worth enough to pay the mortgage back in full.

In CLOs, a typical deal may have €225m AAA debt but €375m assets backing them. This provides a similar cushion for the AAA investors. In a simplified example, the assets could experience €150m of losses before they are worth less than the amount owed on the AAA-rated CLO debt.

The benefit of over-collateralisation

To consistently measure this over-collateralisation, each CLO specifies a series of over-collateralisation tests. These all work in a similar way. You take the total amount of assets in the deal (the underlying loans) and divide it by the CLO debt (e.g. the AAA tranche). We call this an over-collateralisation ratio (OC Ratio). If the OC ratio is above this limit, the test passes. If it is below the limit, then cash flows that would have been paid to the subordinated notes (equity) of the CLO get redirected to increase the ratio back to an acceptable level.

 

 

To ensure the CLO protects noteholders from a buildup of lower quality loans, the OC ratio may be impacted by the current level of CCC’s in a deal. While the CCC bucket in a typical CLO is set at 7.5%, it is important to note that this is a pre-emptive provision. If exceeded, it is only the excess above 7.5% that is measured differently in the OC ratio calculation by being included at market value rather than at par value. We can distill the impact of CCCs on this test in three brief takeaways:

 

  1. The 7.5% CCC number matters in that it is the percentage at which the OC ratio test cushions will start decreasing in a deal, but it is not a hard limit at which CLO managers must sell loans.

  2. 7.5% is not the number at which cashflows will always divert. Fair Oaks’ modelling of a recent CLO transaction shows the CCC percentage will have to rise to more than 15% to trigger a diversion.2

  3. Even if the CCC balance climbs, the CLO is not forced to sell loans – while the manager may elect to sell because they think the value of those loans will deteriorate further, this is an active choice. If they decide to do nothing and the CCC balance climbs to a sufficiently high level, the CLO debt protections will automatically kick-in and redirect cashflows from the equity to the AAA investor.

The CCC excess is a little complicated and that unfortunately can create some confusion when generalists comment or write about it in the press. Importantly, the CCC excess is not a forced liquidation trigger but rather a pre-emptive measure aimed at offering additional protection to CLO debt investors. These tests protect CLO investors and have resulted in the robust credit performance observed over the last 25 years!

 

If you are looking for additional details about how CCCs impact a CLO’s cashflow waterfall please read our whitepaper, Correcting CCC confusion: understanding the impact of CCC assets on CLOs.

 

 

Should you have any queries, please do not hesitate to contact us.

Endnotes

  1. S&P's, "Default, Transition, and Recovery: 2023 Annual Global Leveraged Loan CLO Default And Rating Transition Study", 27-Jun-24.
  2. Fair Oaks Capital as at 09-May-25. Illustrative example using Trinitas Euro 9 CLO. Analysis assumes CCC trading price of 50c.

Capital is at risk. The value of your investment may go down as well as up and you may not get back the amount you invested. Investors should read the key risks section and important information section of this page, KIID and Prospectus prior to investing.

GLOSSARY

Collateralised Loan Obligation (CLO): Securities backed by corporate debt assets. Both CLO securities and underlying assets are typically floating-rate, meaning a regular but variable interest payment is received as it is tied to a benchmark rate (typically EURIBOR in Europe and SOFR in the US). CLO securities are issued in multiple classes ranging from rated debt notes (typically AAA to BB/single-B) to first-loss equity notes. The principal and interest received from CLO’s assets is allocated sequentially between the classes. The payment of interest and principal to holders of CLO equity notes will only be made from the cash flows received on the CLO’s assets after senior ranking classes and expenses of the CLO have been sequentially paid, starting from the most senior class outstanding. CLO debt is sequentially protected by loss-absorbing junior-ranking notes, while the equity note bears the first risk default on the CLO’s assets.

Sustainable Finance Disclosure Regulation (SFDR) classification: Article 8 indicates that the product promotes environmental or social characteristics.

Total Expense Ratio (TER): A measure of the total costs per annum associated with managing and operating the product. This primarily consists of management fees and operating expenses such as trustee, custody or registrations costs. Expressed as a percentage of assets under management.

Current yield: Weighted average current coupon of assets held by the portfolio divided by the weighted current market price of the portfolio. Expressed as a percentage. The coupon of a CLO is typically paid quarterly and is tied to a reference rate (typically EURIBOR in Europe and SOFR in the US). Expressed as a percentage.

Spread to maturity: The discount margin over the benchmark rate (typically EURIBOR in Europe and SOFR in the US) that equates the present value of the portfolio’s cash flows with its market value, if all investments are held to their expected maturities. Expressed as an annual percentage.

Spread duration to maturity: Sensitivity of a bond’s price to a change in credit spreads, modelled based on expected average life for the invested portfolio. Expressed in years.

Total return: The change in value of an investment over a certain timeframe. It includes any net income (such as dividends) and change in capital value. Typically measured net of any fees. Expressed as a percentage change.

Interest rate duration: A measure of the responsiveness of an investment’s price to changes in interest rates. Expressed in years.

Undertakings for collective investment in transferable securities (UCITS): A European regulatory framework for open-ended funds investing in listed securities, authorised and monitored by a regulatory body (such as the Commission de Surveillance du Secteur Financier in Luxembourg or the Central Bank of Ireland in the Republic of Ireland).

Key investor information document (KIID): A short, two-page, document containing essential information about a fund, providing investors an understanding of the key risks and helps them to make an informed investment decision.

 

KEY RISKS

The following risks may affect the Sub-Fund. Full details of all risks the Sub-Fund is exposed to are provided in the Prospectus and KIID.

CLO valuation: The value of a CLO may be affected by a number of factors, including: credit spreads, changes in the performance or the market’s perception of the underlying assets backing the security and changes in the market’s perception of the adequacy of credit support built into the security’s structure to protect against losses. 

CLO liquidity: The secondary market for CLOs may not be as liquid as the secondary market for corporate debt. As a result, the Investment Manager could find it more difficult to sell these investments or may be able to sell them only at prices lower than if they were more widely traded. It may be difficult to establish accurate prices for such investments for the purposes of calculating the Sub-fund’s Net Asset Value. Therefore, prices realised upon the sale of such investments may be lower than the prices used in calculating the Sub-fund’s Net Asset Value.

Dependence on Managers of CLOs: The performance of the Sub-fund’s investments in CLOs will depend in part upon the performance and operational effectiveness of the managers of the CLOs.

Secondary Market Trading Risk: There is no guarantee that trading of ETF Shares on stock exchanges shall be possible including in, but not limited to, the following circumstances (i) such listing has not been achieved and/or maintained, (ii) the rules and requirements of any stock exchanges applicable to the listing of ETF Shares have changed or (iii) trading on such stock exchanges is suspended due to market conditions. Notwithstanding the listing of the ETF Shares on one or more stock exchange, there is no guarantee as to the liquidity of the ETF Shares on any stock exchange or as to the correlation of the trading price of ETF Shares on any stock exchange and the Net Asset Value for such ETF Share. On any given stock exchange, ETF Shares may trade at, above or below their Net Asset Value and such trading price may fluctuate in accordance with changes in the daily Net Asset Value, intraday changes in the Net Asset Value and market supply and demand for ETF Shares.

 

IMPORTANT INFORMATION

FOR INSTITUTIONAL AND INFORMED INVESTORS ONLY.  NO OTHER PERSONS SHOULD RELY ON THE INFORMATION CONTAINED WITHIN THIS PAGE.

Marketing communications issued in the European Economic Area (“EEA”):This page has been issued and approved by Gestion Fondo Endowment, Agencia De Valores, S.A. which is authorised and regulated by the Spanish Comisión Nacional del Mercado de Valores (CNMV) as an authorised investment firm in accordance with the Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments, as amended (MiFID).

Financial promotions outside of the European Economic Area (“EEA”):This page has been issued and approved by Fair Oaks Capital Limited and its affiliates (together “Fair Oaks Capital”). Fair Oaks Capital Limited (FRN: 604090), 1 Old Queen Street, London SW1H 9JA, is authorised and regulated by the United Kingdom Financial Conduct Authority.

Past performance is no indication of future results. Inherent in any investment is the potential for loss. Returns may increase or decrease as a result of currency fluctuations. Target returns and distributions are hypothetical targets only and are neither guarantees nor predictions or projections of future performance. There can be no assurance that such targeted returns will be achieved or that the product will be able to achieve its investment objective, policy or strategy or avoid substantial losses. Any decision to invest should be based on the information contained in the appropriate prospectus and after seeking independent investment, tax and legal advice. The content of this page does not constitute investment advice nor an offer for sale nor a solicitation of an offer to buy any product or make any investment.

No undertaking, representation, warranty or other assurance is given, and none should be implied, as to, and no reliance should be placed on, the accuracy, completeness or fairness of the information or opinions contained in this page.  Any views expressed in this page were held at the time of preparation and are subject to change without notice. The information contained in this page is subject to completion, alteration and verification. Save in the case of fraud, no liability is or will be accepted for such information by Fair Oaks or any of its directors, officers, employees, agents or advisers or any other person.

The distribution of this page in jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this page may come should inform themselves about and observe any such restrictions. In particular, information contained within this page is not for distribution in or into the United States or Canada. Any failure to comply with these restrictions may constitute a violation of the securities law of such jurisdictions.

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An introduction to CLOs

Fair Oaks’ core belief is that the CLO market generates consistent, repeatable, and superior risk-adjusted returns over multiple market cycles versus other credit strategies:

  1. Diversified access to senior secured loans
  2. Attractive yield versus similarly rated credit assets
  3. Historically low default rate through multiple market cycles
  4. Minimal interest rate risk

CLOs are actively managed diversified senior secured loan portfolios, consisting of 100-300 large corporate issuers. While loans typically have extended settlement periods, CLOs settle on a T+2 basis given they are tradable securities, providing liquidity to investors. Each CLO is efficiently financed by long-term debt notes and a first-loss equity note. This combination of diverse underlying senior secured loans, with the structural integrity and flexibility of the CLO structure, enables CLOs to stand apart in the credit markets.

 

Debt notes sequentially receive quarterly interest payments above the reference rate (SOFR/EURIBOR) through a cashflow waterfall.  Payments are first made to senior debt notes (rated AAA) until junior debt notes (rated BB or single-B), with net excess cashflows paid to the equity tranche.

 

Subordination provides protection to debt notes as credit losses flow up through the capital structure. This has resulted in low historical default rates, enabling CLO notes to outperform default rates of similarly rated and even higher rated corporates.

CLOs attract a broad and stable investor base as a result of the credit rating assigned to debt notes, from banks, pension funds and insurance companies to specialized asset managers and hedge funds. As a result, the CLO market now stands at over $1 trillion in size, making it an established and liquid asset class. Given the c.25+ year track record, liquidity profile and opportunity for exposure to loans, CLOs are a key asset class for investors to consider in order to diversify a portfolio.

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Investments can involve significant risk. Past performance is not a guarantee of future performance. The price of investments can go down as well as up and may be affected by changes in rates of exchange. An investor may not get back the amount invested. Target returns and distributions are hypothetical targets only and are neither guarantees nor predictions or projections of future performance. There can be no assurance that such targeted returns will be achieved. The price of investments listed on an exchange is determined by supply and demand, and may not equate to the value of the investment’s underlying assets. Any decision to investment should be based on the information contained in the appropriate prospectus, offering memorandum or equivalent contractual document and after seeking independent investment, tax and legal advice.

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Important notice

This website is operated by Fair Oaks Capital Limited, a limited company registered in England and Wales, with registered number 08260598, having its registered office at 1 Old Queen Street, London, SW1H 9JA. By using this website, you agree to these Terms and Conditions of Use, as well as to Fair Oaks Capital Limited’s Privacy Notice and Cookies Policy (together the “Terms”), which constitute a legal agreement between you and Fair Oaks Capital Limited governing your access to and use of this website. It is your responsibility to review the Terms and to make sure you understand and comply with them. Your compliance with the Terms is an ongoing condition to your use of this website, and you may not use it if you are not prepared to comply with all of the Terms.

Fair Oaks Capital Limited is authorised and regulated by the UK Financial Conduct Authority (“FCA”). References to “we” or “us” shall mean Fair Oaks Capital Limited and, where relevant, its affiliates, including Fair Oaks Capital US LP. Fair Oaks Capital US LP is a Delaware limited partnership with its place of business at 152 West 57 Street, New York, NY 10019.

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This website is provided for your general information only and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any investment.

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Likewise, this website may contain forward-looking statements. These forward-looking statements are subject to uncertainties and inherent risks that could cause actual results to differ materially from those contained in any forward-looking statement. We undertake no duty to update publicly any forward-looking statements contained herein, in light of new information or future developments.

Although the information provided to you on this website is obtained or compiled from sources we believe to be reliable, we cannot and do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available to you for any particular purpose. All information published is in good faith but no representation or warranty, express or implied, is made by us or any person as to its accuracy or completeness and it should not be relied on as such. We shall have no liability for any loss or damage arising out of the use of or reliance on the information provided including, without limitation, any loss or other damage, direct or consequential.

We have published a number of articles in the Insights section of this website. Opinions in such articles are our current opinions, and are subject to change without notice. We assume no responsibility to update information contained in such articles or to notify you of any changes. Any outlooks, forecasts or portfolio weightings presented in such articles are as of the date appearing therein and are also subject to change without notice. We disclaim any responsibility to update such views. Such commentary is intended for ‘institutional investors’ only (as such term is defined in various jurisdictions). Such commentary does not constitute an offer to sell any securities or the solicitation of an offer to purchase any securities. Such commentary discusses topical aspects of credit markets and should not be construed as research, investment advice, or any investment recommendation. Investment concepts mentioned in such commentary may be unsuitable for investors depending on their specific investment objectives and financial position. Fees, commissions, tax considerations and other transaction costs may significantly affect the economic consequences of any investment concepts referenced in such commentary and should be reviewed carefully with one’s investment and tax advisers. All information in such commentary is believed to be reliable as of the date on which this commentary was issued, and has been obtained from sources believed to be reliable. No representation or warranty, either express or implied, is provided in relation to the accuracy or completeness of fairness of the information or opinions contained therein.

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The distribution of the information and material on this website may be restricted by law in certain countries. None of the information is directed at, or is intended for distribution to, or use by, any person or entity in any jurisdiction (by virtue of nationality, place of residence, domicile or registered office) where publication, distribution or use of such information would be contrary to local law or regulation, or would subject us to any registration or licensing requirements in such jurisdiction. You must inform yourself about, and observe any such restrictions in your jurisdiction and by accessing this website you represent that you have done so. The information on this website is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof). None of the funds or other investment products contained on this website have been registered in the United States under the Investment Company Act of 1940 and interests therein are not registered in the United States under the Securities Act of 1933.

We may monitor and/or record any telephone communications and electronic communications with you.

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Investments can involve significant risk. Past performance is not a guarantee of future performance. The price of investments can go down as well as up and may be affected by changes in rates of exchange. An investor may not get back the amount invested. Target returns and distributions are hypothetical targets only and are neither guarantees nor predictions or projections of future performance. There can be no assurance that such targeted returns will be achieved. The price of investments listed on an exchange is determined by supply and demand, and may not equate to the value of the investment’s underlying assets. Any decision to investment should be based on the information contained in the appropriate prospectus, offering memorandum or equivalent contractual document and after seeking independent investment, tax and legal advice.

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HOW TO INVEST IN FAIR OAKS AAA CLO ETF

Via primary market

through authorised participants

Via OTC

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Via exchange

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Please confirm your country of residence and investor type:

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By selecting Professional Client, you affirm either that you are a Per Se Professional Client, or that you wish to be treated as an Elective Professional Client, both as defined under the markets in Financial Instruments Directive (in the case of persons access this website from the UK, as transposed into UK law), or an equivalent in a jurisdiction outside the European Economic Area.

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Important notice

This website is operated by Fair Oaks Capital Limited, a limited company registered in England and Wales, with registered number 08260598, having its registered office at 1 Old Queen Street, London, SW1H 9JA. By using this website, you agree to these Terms and Conditions of Use, as well as to Fair Oaks Capital Limited’s Privacy Notice and Cookies Policy (together the “Terms”), which constitute a legal agreement between you and Fair Oaks Capital Limited governing your access to and use of this website. It is your responsibility to review the Terms and to make sure you understand and comply with them. Your compliance with the Terms is an ongoing condition to your use of this website, and you may not use it if you are not prepared to comply with all of the Terms.

Fair Oaks Capital Limited is authorised and regulated by the UK Financial Conduct Authority (“FCA”). References to “we” or “us” shall mean Fair Oaks Capital Limited and, where relevant, its affiliates, including Fair Oaks Capital US LP. Fair Oaks Capital US LP is a Delaware limited partnership with its place of business at 152 West 57 Street, New York, NY 10019.

Content of this website

This website is provided for your general information only and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any investment.

Nothing on this website is advice on the merits of any product or investment, nothing constitutes investment, legal, tax or any other advice nor is it to be relied on in making an investment decision. Prospective investors should obtain independent investment advice and inform themselves as to applicable legal requirements, exchange control regulations and taxes in their jurisdiction.

This website complies with the regulatory requirements of the United Kingdom. There may be laws in your country of nationality or residence or in the country from which you access this website which restrict the extent to which the website may be made available to you. If you are not permitted to access this website in accordance with the laws of your country or nationality of residence then please leave this website now.

Certain information contained on this website may be of a historical nature and may now be out of date. All historical information should be understood as speaking from the date of its first publication.

Likewise, this website may contain forward-looking statements. These forward-looking statements are subject to uncertainties and inherent risks that could cause actual results to differ materially from those contained in any forward-looking statement. We undertake no duty to update publicly any forward-looking statements contained herein, in light of new information or future developments.

Although the information provided to you on this website is obtained or compiled from sources we believe to be reliable, we cannot and do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available to you for any particular purpose. All information published is in good faith but no representation or warranty, express or implied, is made by us or any person as to its accuracy or completeness and it should not be relied on as such. We shall have no liability for any loss or damage arising out of the use of or reliance on the information provided including, without limitation, any loss or other damage, direct or consequential.

We have published a number of articles in the Insights section of this website. Opinions in such articles are our current opinions, and are subject to change without notice. We assume no responsibility to update information contained in such articles or to notify you of any changes. Any outlooks, forecasts or portfolio weightings presented in such articles are as of the date appearing therein and are also subject to change without notice. We disclaim any responsibility to update such views. Such commentary is intended for ‘institutional investors’ only (as such term is defined in various jurisdictions). Such commentary does not constitute an offer to sell any securities or the solicitation of an offer to purchase any securities. Such commentary discusses topical aspects of credit markets and should not be construed as research, investment advice, or any investment recommendation. Investment concepts mentioned in such commentary may be unsuitable for investors depending on their specific investment objectives and financial position. Fees, commissions, tax considerations and other transaction costs may significantly affect the economic consequences of any investment concepts referenced in such commentary and should be reviewed carefully with one’s investment and tax advisers. All information in such commentary is believed to be reliable as of the date on which this commentary was issued, and has been obtained from sources believed to be reliable. No representation or warranty, either express or implied, is provided in relation to the accuracy or completeness of fairness of the information or opinions contained therein.

Distribution of information

The distribution of the information and material on this website may be restricted by law in certain countries. None of the information is directed at, or is intended for distribution to, or use by, any person or entity in any jurisdiction (by virtue of nationality, place of residence, domicile or registered office) where publication, distribution or use of such information would be contrary to local law or regulation, or would subject us to any registration or licensing requirements in such jurisdiction. You must inform yourself about, and observe any such restrictions in your jurisdiction and by accessing this website you represent that you have done so. The information on this website is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof). None of the funds or other investment products contained on this website have been registered in the United States under the Investment Company Act of 1940 and interests therein are not registered in the United States under the Securities Act of 1933.

We may monitor and/or record any telephone communications and electronic communications with you.

Risk Warnings

Investments can involve significant risk. Past performance is not a guarantee of future performance. The price of investments can go down as well as up and may be affected by changes in rates of exchange. An investor may not get back the amount invested. Target returns and distributions are hypothetical targets only and are neither guarantees nor predictions or projections of future performance. There can be no assurance that such targeted returns will be achieved. The price of investments listed on an exchange is determined by supply and demand, and may not equate to the value of the investment’s underlying assets. Any decision to investment should be based on the information contained in the appropriate prospectus, offering memorandum or equivalent contractual document and after seeking independent investment, tax and legal advice.

Linked Websites

This website may provide addresses or hyperlinks which lead you to other websites (“Linked Sites”). We have not reviewed nor do we endorse or recommend any products or services offered or information contained on Linked Sites, and disclaim any liability for their content or any consequences of their use. Any web addresses and hyperlinks in this website are provided solely for convenience and information. Accessing any Linked Sites shall be at your own risk.

IP rights

This website and its content are owned by Fair Oaks Capital Limited, and may contain information, text, graphics, video, software, logos, and other materials (“Content”) that are protected by copyright, trademarks, or other proprietary rights. No permission is granted to upload, copy, modify, post, frame, amend or distribute any of the Content of this website in any way without obtaining the prior written permission of Fair Oaks Capital Limited. All intellectual property rights in any part of the world which subsist in the Contents of this website and which belong to Fair Oaks Capital Limited, save as expressly granted, are hereby reserved. This website contains various registered and unregistered trade marks belonging to Fair Oaks Capital Limited. The registered trademarks include, but are not limited to, “Fair Oaks”, “Fair Oaks Capital” and the Fair Oaks Capital logo.

Jurisdiction

Use of this website shall be governed by and construed in accordance with the laws of England and Wales and any dispute arising in relation to this website is subject to the jurisdiction of the English courts.

Variation of Terms of Use

We reserve the right to vary these terms of use at any time and will post any variations here. You are advised to review these terms of use on a regular basis as you will be deemed to have accepted variations if you continue to use the website after they have been posted.

The contents of this website are only accessible by Professional Clients and Eligible Counterparties. Retail Investors should not view or seek to rely on any information contained in this website and should in all instances consult their financial adviser. The Prospectus, Financial Reports and Key Investor Information Documents relating to the ETF Class(es) of the Fund referenced on this website can be found at www.waystone.com/our-funds/waystone-managed-funds/

Notice to Swiss Investors: By selecting “Professional Client”, you are confirming that you are a Qualified Investor in Switzerland as defined in the Swiss Collective Investment Schemes Act of 23 June 2006, as amended and its implementing ordinance. This website can only be accessed in Switzerland by Qualified Investors.

If you are not a Qualified Investor in Switzerland (as defined in the Swiss Collective Investment Schemes Act of 23 June 2006, as amended and its implementing ordinance) then please leave this website now. Certain of the products on this website may not be distributed other than to Qualified Investors.

The Swiss representative and paying agent of the Fair Oaks AAA CLO Fund, a Luxembourg domiciled UCITS sub-fund, is RBC Investor Services Bank S.A., Esch-sur- Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The latest Prospectus, Key Investor Information Document (KIID), Articles of Association and annual and semi-annual reports relating to the Fair Oaks AAA CLO Fund can each be obtained free of charge from the Swiss representative and paying agent. The place of performance and jurisdiction is the registered office of the Swiss representative with regards to shares of the Fair Oaks AAA CLO Fund distributed in and from Switzerland.

Terms and Conditions

Important notice

This website is operated by Fair Oaks Capital Limited, a limited company registered in England and Wales, with registered number 08260598, having its registered office at 1 Old Queen Street, London, SW1H 9JA. By using this website, you agree to these Terms and Conditions of Use, as well as to Fair Oaks Capital Limited’s Privacy Notice and Cookies Policy (together the “Terms”), which constitute a legal agreement between you and Fair Oaks Capital Limited governing your access to and use of this website. It is your responsibility to review the Terms and to make sure you understand and comply with them. Your compliance with the Terms is an ongoing condition to your use of this website, and you may not use it if you are not prepared to comply with all of the Terms.

Fair Oaks Capital Limited is authorised and regulated by the UK Financial Conduct Authority (“FCA”). References to “we” or “us” shall mean Fair Oaks Capital Limited and, where relevant, its affiliates, including Fair Oaks Capital US LP. Fair Oaks Capital US LP is a Delaware limited partnership with its place of business at 152 West 57 Street, New York, NY 10019.

Content of this website

This website is provided for your general information only and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any investment.

Nothing on this website is advice on the merits of any product or investment, nothing constitutes investment, legal, tax or any other advice nor is it to be relied on in making an investment decision. Prospective investors should obtain independent investment advice and inform themselves as to applicable legal requirements, exchange control regulations and taxes in their jurisdiction.

This website complies with the regulatory requirements of the United Kingdom. There may be laws in your country of nationality or residence or in the country from which you access this website which restrict the extent to which the website may be made available to you. If you are not permitted to access this website in accordance with the laws of your country or nationality of residence then please leave this website now.

Certain information contained on this website may be of a historical nature and may now be out of date. All historical information should be understood as speaking from the date of its first publication.

Likewise, this website may contain forward-looking statements. These forward-looking statements are subject to uncertainties and inherent risks that could cause actual results to differ materially from those contained in any forward-looking statement. We undertake no duty to update publicly any forward-looking statements contained herein, in light of new information or future developments.

Although the information provided to you on this website is obtained or compiled from sources we believe to be reliable, we cannot and do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available to you for any particular purpose. All information published is in good faith but no representation or warranty, express or implied, is made by us or any person as to its accuracy or completeness and it should not be relied on as such. We shall have no liability for any loss or damage arising out of the use of or reliance on the information provided including, without limitation, any loss or other damage, direct or consequential.

We have published a number of articles in the Insights section of this website. Opinions in such articles are our current opinions, and are subject to change without notice. We assume no responsibility to update information contained in such articles or to notify you of any changes. Any outlooks, forecasts or portfolio weightings presented in such articles are as of the date appearing therein and are also subject to change without notice. We disclaim any responsibility to update such views. Such commentary is intended for ‘institutional investors’ only (as such term is defined in various jurisdictions). Such commentary does not constitute an offer to sell any securities or the solicitation of an offer to purchase any securities. Such commentary discusses topical aspects of credit markets and should not be construed as research, investment advice, or any investment recommendation. Investment concepts mentioned in such commentary may be unsuitable for investors depending on their specific investment objectives and financial position. Fees, commissions, tax considerations and other transaction costs may significantly affect the economic consequences of any investment concepts referenced in such commentary and should be reviewed carefully with one’s investment and tax advisers. All information in such commentary is believed to be reliable as of the date on which this commentary was issued, and has been obtained from sources believed to be reliable. No representation or warranty, either express or implied, is provided in relation to the accuracy or completeness of fairness of the information or opinions contained therein.

Distribution of information

The distribution of the information and material on this website may be restricted by law in certain countries. None of the information is directed at, or is intended for distribution to, or use by, any person or entity in any jurisdiction (by virtue of nationality, place of residence, domicile or registered office) where publication, distribution or use of such information would be contrary to local law or regulation, or would subject us to any registration or licensing requirements in such jurisdiction. You must inform yourself about, and observe any such restrictions in your jurisdiction and by accessing this website you represent that you have done so. The information on this website is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof). None of the funds or other investment products contained on this website have been registered in the United States under the Investment Company Act of 1940 and interests therein are not registered in the United States under the Securities Act of 1933.

We may monitor and/or record any telephone communications and electronic communications with you.

Risk Warnings

Investments can involve significant risk. Past performance is not a guarantee of future performance. The price of investments can go down as well as up and may be affected by changes in rates of exchange. An investor may not get back the amount invested. Target returns and distributions are hypothetical targets only and are neither guarantees nor predictions or projections of future performance. There can be no assurance that such targeted returns will be achieved. The price of investments listed on an exchange is determined by supply and demand, and may not equate to the value of the investment’s underlying assets. Any decision to investment should be based on the information contained in the appropriate prospectus, offering memorandum or equivalent contractual document and after seeking independent investment, tax and legal advice.

Linked Websites

This website may provide addresses or hyperlinks which lead you to other websites (“Linked Sites”). We have not reviewed nor do we endorse or recommend any products or services offered or information contained on Linked Sites, and disclaim any liability for their content or any consequences of their use. Any web addresses and hyperlinks in this website are provided solely for convenience and information. Accessing any Linked Sites shall be at your own risk.

IP rights

This website and its content are owned by Fair Oaks Capital Limited, and may contain information, text, graphics, video, software, logos, and other materials (“Content”) that are protected by copyright, trademarks, or other proprietary rights. No permission is granted to upload, copy, modify, post, frame, amend or distribute any of the Content of this website in any way without obtaining the prior written permission of Fair Oaks Capital Limited. All intellectual property rights in any part of the world which subsist in the Contents of this website and which belong to Fair Oaks Capital Limited, save as expressly granted, are hereby reserved. This website contains various registered and unregistered trade marks belonging to Fair Oaks Capital Limited. The registered trademarks include, but are not limited to, “Fair Oaks”, “Fair Oaks Capital” and the Fair Oaks Capital logo.

Jurisdiction

Use of this website shall be governed by and construed in accordance with the laws of England and Wales and any dispute arising in relation to this website is subject to the jurisdiction of the English courts.

Variation of Terms of Use

We reserve the right to vary these terms of use at any time and will post any variations here. You are advised to review these terms of use on a regular basis as you will be deemed to have accepted variations if you continue to use the website after they have been posted.

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