European deals have lumpy exposure to Aleris, says JP Morgan

JP Morgan says that Aleris, the aluminium company that filed for bankruptcy last week, is present in 125 US CLOs and 21 European deals. Average concentrations are 0.56% for the US deals and 1.47% for the European CLOs, according to the bank's latest CDO weekly report. The total exposure is $326 million for the US CLOs and $119 million for the European deals, all of which are first-lien loans.

Charter Communications, which is expected to file for bankruptcy shortly, is present in almost all US CLOs, according to the report, with a total of $655 million first lien exposure and $57 million of second lien loans. Charter is expected to recover much higher than Aleris. The telecom company's first lien loan was trading at 79 points at the end of last week.