DoubleLine Yield Opportunities Fund Completes Initial Public Offering

Fund Initially to Tilt Portfolio Holdings toward Securitized Credit

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Feb 26, 2020, 09:29 ET

LOS ANGELES, Feb. 26, 2020 /PRNewswire/ -- The DoubleLine Yield Opportunities Fund (the "Fund") has completed an initial public offering (IPO) of common shares listed on the New York Stock Exchange (NYSE), the Fund's investment adviser DoubleLine Capital LP ("DoubleLine") announced today. The newly organized, non-diversified, limited-term closed-end management investment company trades under the symbol DLY.

The Fund raised approximately $920 million in proceeds in the offering of 46 million common shares at $20 per share.

UBS Securities LLC, BofA Securities, Inc., Morgan Stanley & Co. LLC, and Wells Fargo Securities, LLC, served as lead underwriters in connection with the offering. The Fund has granted the underwriters an option to purchase an additional 6.9 million common shares at the public offering price within 45 days of the date of the Prospectus, February 25, 2020, solely to cover overallotments, if any.

DoubleLine (and not the Fund) has agreed to pay from its own assets all organizational expenses of the Fund and all offering costs associated with this offering of common shares. The Fund is not obligated to repay any such organizational expenses or offering costs.

About the DoubleLine Yield Opportunities Fund

The Fund's investment objective is to seek a high level of total return, with an emphasis on current income. DoubleLine believes active asset allocation across a broad range of fixed income sectors with a disciplined approach to risk management offers value-added opportunities for both income and capital growth. The Fund cannot ensure that it will achieve its investment objective, and investing in the Fund involves risks, including the risk that you may receive little or no return on your investment or that you may lose part or even all of your investment.

Jeffrey Gundlach and Jeffrey Sherman have primary responsibility for the day-to-day portfolio management of the Fund. Mr. Gundlach is the founder, Chief Executive Officer (CEO), and Chief Investment Officer (CIO) of DoubleLine, positions he has held since the firm's inception. Mr. Sherman was named as DoubleLine's Deputy Chief Investment Officer in June 2016. He has been a Portfolio Manager at DoubleLine since September 2010.

Under normal market conditions, the Fund will seek to achieve its investment objective by investing in a portfolio of investments selected for its potential to provide a high level of total return, with an emphasis on current income. The Fund may invest in debt securities and other income-producing investments of issuers anywhere in the world, including in emerging markets, and may invest in investments of any credit quality. The Fund expects initially, and may thereafter continue, to invest substantially in debt instruments of below investment grade quality (including debt securities commonly referred to as "high yield" securities or "junk bonds") and unrated instruments. The Fund may invest in securities of any or no maturity or negative duration, and there are no limits on the duration of the Fund's portfolio.

DoubleLine expects that the Fund will normally not invest more than 50% of its total managed assets (as defined in the Prospectus) in a single sector of the debt market (excluding the U.S. Government securities sector), as determined by DoubleLine. In general, the sectors of the debt market among which DoubleLine expects to allocate the Fund's assets principally from time to time include, among others, commercial mortgage-backed securities ("CMBS"), Agency residential mortgage-backed securities ("Agency MBS"), non-Agency residential mortgage backed securities ("RMBS"), non-mortgage-related asset-backed securities ("ABS"), investment grade corporate debt, high yield corporate debt, bank and other loans, international sovereign debt, emerging market debt, collateralized loan obligations ("CLOs"), U.S. Government securities, and municipal debt.

As soon as reasonably practicable, the Fund intends, subject to then favorable market conditions, to add leverage to its portfolio. The Fund currently expects, subject to then favorable market conditions, to seek to use leverage through either borrowings, preferred securities, or both.

Limited Term

The Fund intends to terminate as of the first business day following the 12th anniversary of the effective date of the Fund's initial registration statement, which will occur on or about February 25, 2032 (the "Dissolution Date"). The Fund's Board of Trustees may vote, without shareholder approval, to extend the Dissolution Date (i) once for up to one year, and (ii) once for up to an additional six months, to a date up to and including the 18th month after the initial Dissolution Date. Upon dissolution, each holder of common shares of beneficial interest would be paid a pro rata portion of the Fund's net assets as determined as of the Dissolution Date.

Fund Investment Process and Portfolio Construction

DoubleLine's Fixed Income Asset Allocation ("FIAA") Committee meets monthly under the leadership of Mr. Gundlach as Chairman to assess relative value and potential risks across debt sectors. The FIAA begins by conducting a top-down macroeconomic assessment of global markets. Fundamental valuations and technical research are presented and discussed at the meeting, with experienced portfolio managers discussing their respective sectors of expertise. The decision to overweight or underweight a sector is determined based on, among other things, fundamentals and relative valuation. The sector managers implement security selection decisions at the sector level.

Initially the Fund is expected to have significant holdings of securitized credit, such as commercial mortgage-backed securities, non-agency residential mortgage backed securities, non-mortgage-related asset-backed securities and CLOs, with a relative underweight to the corporate credit sectors, such as investment grade and high yield corporate debt. However, throughout the market cycle, the Fund has flexibility to allocate more capital to the traditional corporate credit market.

On average, the FIAA Committee members have worked together for 15 years. In addition to Mr. Gundlach and Mr. Sherman, the committee members include FIAA strategists and senior portfolio managers on teams focused on the following market sectors: Agency MBS, non-Agency MBS, CMBS/Commercial Real Estate, Global Developed Credit, International Fixed Income, CLOs & Multi Asset, ABS & Infrastructure, and Government securities.

About DoubleLine Capital LP

DoubleLine is an investment adviser registered under the Investment Advisers Act of 1940. DoubleLine and its related entities manage over $150 billion in assets across all vehicles, including open-end mutual funds, collective investment trusts, closed-end funds, exchange-traded funds, hedge funds, variable annuities, UCITS and separate accounts. DoubleLine's offices can be reached by telephone at (213) 633-8200 or by e-mail at [email protected]. Media can reach DoubleLine by e-mail at [email protected]. DoubleLine® is a registered trademark of DoubleLine Capital LP.

As the Fund is newly organized, its common shares have no history of operations or public trading. Because of the risks associated with investing in mortgage-related and other asset-backed securities, CLOs, high yield securities, foreign and emerging market securities, and using leverage, among other risks, an investment in the Fund is not intended as a complete investment program. The Fund is designed as a long-term investment and not as a trading vehicle.

This document is not an offer to sell securities or the solicitation of an offer to buy securities, nor shall there be any sale or offer of these securities, in any jurisdiction where such sale or offer is not permitted. This document is not an offering, which can only be made by a prospectus. The information in this press release is not complete and is subject to change.

Investors should consider the Fund's investment objectives, risks, charges and expenses carefully before investing. The Prospectus, which contains this and other important information about the Fund, should be read carefully before investing. A copy of the Prospectus can be obtained on the SEC website by clicking here. An investment in the Fund should not constitute a complete investment program.

Shares of closed-end investment companies frequently trade at a discount to their net asset value, which may increase investors' risk of loss. This risk may be greater for investors expecting to sell their shares in a relatively short period after the completion of this public offering.

Investing involves risk. Principal loss is possible. Investments in debt securities typically decline in value when interest rates rise. This risk is usually greater for longer-term debt securities. Investments in asset-backed and mortgage-backed securities include additional risks that investors should be aware of including credit risk, prepayment risk, possible illiquidity and default, as well as increased susceptibility to adverse economic developments. The Fund may invest in foreign securities which involve greater volatility and political, economic and currency risks and differences in accounting methods. These risks are greater for investments in emerging markets. Investments in lower rated and non-rated securities present a greater risk of loss to principal and interest than higher rated securities. The Fund may invest without limit in securities rated below investment grade (securities rated Ba1 or below by Moody's and BB+ or below by S&P and Fitch or unrated securities judged by DoubleLine to be comparable quality). Debt securities of below investment grade quality are regarded as having predominantly speculative characteristics with respect to capacity to pay interest and to repay principal, and include securities commonly referred to as "high yield" securities or "junk bonds." There is no assurance the Fund's leveraging strategies will be successful. Leverage is a speculative technique that may expose the Fund to greater risk and increased cost. The value of the Fund's investments in real estate-related industries may change in response to changes in the real estate market such as declines in the value of real estate, lack of available capital or financing opportunities, and increase in property taxes or operating costs. Derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. Investing in derivatives could lose more than the amount invested. The Fund may make short sales of securities, which involve the risk that losses may exceed the original amount invested. The Fund is a "non-diversified" investment company and therefore may invest a greater percentage of its assets in the securities of a single issuer or a limited number of issuers than funds that are "diversified." Accordingly, the Fund is more susceptible to risks associated with a single economic, political or regulatory occurrence than a diversified fund might be.

This material may include statements that constitute "forward-looking statements" under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Fund, market or regulatory developments. The views expressed herein are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed herein are subject to change at any time based upon economic, market, or other conditions and DoubleLine undertakes no obligation to update the views expressed herein. While we have gathered this information from sources believed to be reliable, DoubleLine cannot guarantee the accuracy of the information provided. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed herein (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Fund's trading intent. Information included herein is not an indication of the Fund's future portfolio composition.

Quasar Distributors, LLC provides filing administration for DoubleLine Capital LP.

SOURCE DoubleLine