Oaktree formed the senior bank loan strategy in September 2007 to capitalize on the backlog of "hung" bridge loans held by investment banks. As the market environment changed, we expanded the strategy to include investing in senior bank loans in general. We select bank loans and senior debt from the middle and upper quality tiers of the non-investment-grade debt market. In most instances, the instruments in which we invest constitute the most senior component in the borrower’s capital structure.

"In analyzing potential loan investments, we utilize the credit analysis approach and proprietary credit scoring matrix that has been successfully applied by our high yield bond team for more than two decades," says Desmund Shirazi, who manages the strategy under the direct supervision of Sheldon Stone. "The primary emphasis is on capital preservation and understanding the value of the collateral supporting our investment."

We focus primarily on U.S. dollar-denominated loans secured by first priority liens in performing companies within the U.S. and Canada. We may also invest in non-dollar-denominated loans, second lien loans, or unsecured bonds where we believe the value of the underlying business comfortably exceeds the value of our claim in a downside scenario.