Prudential nods through least amend-and-extends, say Barcap

Some CLO managers have been much more aggressive than others in participating in loan amendments which increase the maturity of the loans, according to a recent research report by Barclays Capital. The bank calculated how often managers participated in amend-and-extend deals, and how often they passed up the opportunity to participate, looking only at managers that four or more extension candidates across their various deals.

The researchers found that managers typically made the same decision on amend-and-extend across all their various deals. This, according to the report, suggests that managers are taking credit views on the names rather than structural views about their CLOs.

Barclays Capital found that Prudential was the only CLO manager that participated in none of the amend-and-extend opportunities presented to it. It was followed by Kingsland, which have five extension candidates across five deals and chose not to participate in 95% of cases.

However, of 130 managers in Barclays’ sample, only 40 passed up on 50% or more of the extension opportunities, suggesting that most managers continue to participate in most extension amendments.