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Short duration CLOs are putting reset risk in the post: Barclays
1 year ago
The CLO market’s recent trend of shorter duration issuance could be setting up a problem for managers down the line that will impact their equity returns, Barclays has warned -
Euro double As and US triple As offer best value in CLOs: BNP Paribas
1 year ago
Secondary market double A rated tranches offer the best relative value in European CLOs’ capital structures, while US triple As in primary starting to look attractive, according to BNP Paribas credit strategists -
CLO spreads are not pricing in recession: JP Morgan
1 year ago
CLOs are priced fairly for a growth slowdown but not a recession, according to JP Morgan credit strategists, who warn spreads are at risk if US growth contracts -
Manager selection stakes are heightening as CLO pain points intensify: Barclays
1 year ago
CLOs’ slump in market value and piling of distressed assets have made differentiation between managers much more acute on key metrics, regionally and by vintage, according to Barclays credit strategists -
CLO investors show more signs of optimism than other ABS: Barclays
1 year ago
CLO investors attending the Global ABS conference in Barcelona were more upbeat than those that work in residential mortgage-backed securities and other ABS, say Barclays securitised credit strategists. But the overall mood was sombre -
CLO top stack offers best value versus corp debt after junior tranche rally: Barclays
1 year ago
Having lagged in the recent market recovery, CLO triple A paper looks attractive versus corporate investment grade and the CDX IG credit derivatives index -
BofA revises Euro CLO new issuance forecasts downwards
1 year ago
Bank of America CLO strategists have cut their base case forecasts for European CLO volume in 2022 to €22.6 billion for new issues and €10 billion for refi/resets, citing slower economic growth and higher tail risks. But further market disruption could take new issuance down to €16.5 billion, they warned -
Think of the arb, say US CLO panelists after big loan drop
1 year ago
Far from being a cause for alarm, falling loan prices have brought a welcome opportunity in new CLO issuance for managers and investors, according to speakers at the Creditflux Symposium in London today -
Macro woes have dented CLO and loan outlook: Barclays
1 year ago
Rising interest rates and elevated macro volatility have negatively impacted the performance outlook for both loans and CLOs, according to Barclays credit strategists -
CLOs look attractive after corporate rally - but not all tranches: Barclays
2 years ago
Rallying corporate cash credit spreads over the past two weeks have widened the basis with CLOs and made these products look attractive again, according to Barclays strategists -
Hidden loan tail risks and mounting single B exposure could pose problem for CLOs: Barclays
2 years ago
A solid rally for leveraged loans this week - against returning weakness in bonds - has put focus back on the market, which seemingly has little tail risk priced in. But short term support factors and a dwindling triple C bucket mask the quality skew, warn Barclays strategists in a note today - which could spell downgrades for single-B minus rated loans -
European CLOs well-placed to counter volatility: Fitch
2 years ago
High inflation could hamper borrowers, but European CLOs are in decent shape with most loan issuers having refinanced last year, according to a report by Fitch Ratings. Other parts of structured credit are not as well insulated against risks. -
CLO equity returns to flatten while Sofr transition gains fresh impetus: BofA
2 years ago
CLO equity returns are forecasted to be relatively low in the first half of the year, and as this plays out there could be greater incentive for equity investors to push for a switch in CLO benchmark to Sofr. -
CLO mezz investors are homing in on documentation: Morgan Stanley
2 years ago
European CLO mezzanine investors paid close attention to documentation over the past 12 months, with junior overcollateralisation test criteria, weighted average life extesions and approval for collateral quality key areas of focus, say Morgan Stanley strategists -
CLO equity could get hurt by mismatch in credit spread adjustments: Barclays
2 years ago
The possibility that borrowers and sponsors start to use their clout to scrap credit spread adjustments from leveraged loans poses a risk for new CLO equity, while legacy deals also face transition challenges -
Impact of Russia-Ukraine war on Euro CLOs will be indirect, finds BofA
2 years ago
European companies largely do not have much direct exposure to Russia or Ukraine, but pricing and inflationary pressures may impact companies -
CLO investor cash balances at lowest levels since 2009: JP Morgan research
2 years ago
A survey conducted by JP Morgan has suggested that CLO investors' cash balances are at their lowest levels since 2009 - but most managers want to add risk in the coming months -
CLO lower cap stack will outperform with $175bn new issuance in 2022: JP Morgan
2 years ago
Equity and lower rated tranche investors will do best as $175 billion of global new CLO issuance arrives in 2022, predict JP Morgan strategists in their annual outlook, taking market size to $1.2 trillion -
CLO resets drive equity returns to highest in five years: JP Morgan
2 years ago
Equity investors in US CLOs are earning, on average, the biggest returns of the past five years, finds JP Morgan – with deals reset this year having done most to raise the numbers -
Sofr transition timing puts CLO debt and equity at odds, says BNP Paribas
2 years ago
CLO investors look to have tough conversations ahead on the structure implications of the transition from Libor to Sofr, with BNP Paribas strategists noting CLO debt will benefit from an early move while equity tranches would do better to wait -
Long duration high yield will overcome short-term rates carnage, says BofA
2 years ago
Bonds with inflation-protected real yield, longer duration, and especially those in the utilities sector are among the most compelling trades amid a phase of ‘policy paranoia’, according to Bank of America credit strategists -
BofA revises global CLO new issuance forecasts upwards but refi/reset forecasts diverge
2 years ago
CLO strategists at Bank of America have boosted forecasts for European and US CLO 2021 new issuance volume for the second time this year. But projections for refi/reset volumes across the continent have been tweaked in two separate directions -
CLOs stand to win from US capital cost refinement, says BofA
2 years ago
A move by US insurance regulators to refine the capital charge framework for structured products will make CLOs more attractive versus corporate bonds, according to Bank of America strategists -
CLO demand to drive loan outperformance over bonds: BNP Paribas
2 years ago
The buying power of CLOs and funds could mean leveraged loans rally further and outpace high yield bonds, says BNP Paribas' credit research team -
JP Morgan raises 2021 US CLO forecast to record $135 billion
2 years ago
JP Morgan's research desk has raised its US CLO new issue forecast for 2021 to $135 billion
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