Creditflux

Investors seek oasis as new issues dry up

CLO investors should be looking at CSOs

Investments in CSOs can be more fruitful than in CLOs

CLOs at a glance

A round-up of CLO performance

Fund performance

High yield bonds regain lost ground

CLOs at a glance
Managers focus on AUM building via new issues

We can’t hide it any longer, we’re tiering up
With the opening months of 2019 highlighting a clear class system among CLO managers, there has never been a better time to assess tiering. We find that timing, patience and luck all play a role

Loans recover slightly after late-2018 havoc
Secondary loan prices have ticked higher this year, although they are still some way off the levels reached before the fourth quarter slump. However, M&As are starting to fill the new issue pipeline
 

Keep calm and buy corporate loans
Calm heads prevailed in 2018. Markets were volatile and risk retention was supposed to cause problems, but there was no need to panic and volumes went on to break records set in 2014

Retail fund pain is a CLO manager’s gain
Retail funds dumped loans in record volumes late in 2018, creating ideal conditions for CLOs to capitalise with performing credits available in the mid-90s for the first time in years

Loan volumes fall in Europe but rise in US
European CLO managers seem to be eating into the loan market with more appetite than their, US counterparts, who are perhaps spoiled for choice. But background risks lurk in both markets

After early crescendo CLOs end on flat note
Huge issuance and the end of risk retention ensured the US CLO industry was buoyant in early 2018, but later in the year the term curve flattened, pricing levels became sporadic and volumes dwindled

Buy and hold isn’t only option for CLO equity
New US CLO equity is being more regularly flipped into b-wics. Figures suggest that equity pieces of 2017 and 2018 US deals made up 22% of the b-wic market over the past four quarters

Widening whisks market back to 2017
Right now, CLO volumes are healthy and the list of active managers is steadily growing. But with CLO liability spreads reverting to where they were a year ago, some issuers are a little nervous.

New issues keep managers busy in summer season
New issue loans made up 74.1% of volumes in August, supporting US CLO managers looking to ramp up. Spreads tightened to 368bp, but managers can’t complain — it’s much better than in Q1

Wide CLO pricing need not be a drag
Established managers can price CLO liabilities at attractive levels, but we find that CLOs saddled with higher financing costs have nevertheless been among the market’s outstanding performers

Loan market finds balance as spreads edge wider
New issue volumes were robust in July with relatively few loan refinancings getting done. Loan portfolio managers say the loan market is finally balanced, having been in favour of borrowers

Tastes change in secondary trading
Our analysis of the secondary market shows that, since 2013, appetite for CLOs run by tier one managers persists through market dips and rallies.

Building new ways to evaluate CLOs
For CLO investors, there is no longer a question of whether a particular CLO will be reworked; instead, they must judge when, and how dramatically, its terms will change. By Tom Davidson

Who predicted $145 billion of issuance?
That went better than expected: US risk retention came in, and $145 billion of global new issuance later, it’s clear that CLOs aren’t disappearing. By Tanvi Gupta and Sam Robinson

Managers pick spots on CLO curve
As refi volumes slowed through 2017, the term curve for CLOs steepened, leading managers to vary their deal tenors as they sought to hit the evolving sweet spot.

CLO managers return to new issues
The frenetic pace of refis and resets slowed in the third quarter as CLO managers – new and old – turned their attention to building assets

Refinancing and reset options change the face of CLOs
The CLO market is going into overdrive, with refis, resets and new issue deals combining to give investors an unprecedented choice of maturities.