CLO equity investors join forces to take on lowly loan CSAs
Private equity firms have held the upper-hand against US loan investors in the past few months, but the largest CLO equity investors in the business are working together to redress the imbalance between PE sponsors and creditors

"Some CLO managers are asleep at the wheel and surrendering economics without any objection"
Some CLO managers aren’t blocking loan amendments with insufficient credit spread adjustments  

Loan managers must act to prevent CSA leakage, say CLO investors
CLO investors have made clear that managers need to stay on top of US loan amendments that are switching benchmark from Libor to Sofr

CLO managers get dusters out for ‘clean-up’ issuance
As leveraged loan prices recovered some of their value through November, a number of CLO issuers took the opportunity to term out underwater warehouses

"With tools and data available, why do fake sellers need to abuse the b-wic process for price discovery?"
Penalties for CLO b-wic sellers who routinely do not trade would improve the secondary CLO market

Banks are motivated sellers of loans and CLOs can benefit, says Eagle Point
Banks offloading loans long held on their balance sheets are providing CLOs with the opportunity to pickup primary market assets at deeply discounted prices, Tom Majewski, managing partner at Eagle Point Credit Management said on a company earnings call on Tuesday

"CLOs could withstand another 13.4% of downgrades to triple C if the price drops to 50"
CLOs are well positioned, even if there are mass downgrades to triple C  

Eagle Point and Investcorp are latest CLO firms to target SRTs
CLO investors and asset managers are increasingly warming to significant risk transfers (SRTs), with Eagle Point Credit Management and Investcorp Credit Management two recent examples

"There is ample time and flexibility on the pathway from warehouse to securitisation"
A big loan sell-off does not mean CLO warehouses will be forced to liquidate  

LP round up: $2.7bn flows to 20 credit managers as investors battle PE overallocation
Investors faced huge headwinds in September with inflation, rising interest rates, and geopolitical turmoil, alongside the UK gilts sell-off at month end

Market sentiment shifts as investors turn bullish on loans and CLOs
CLO market sentiment has shifted decisively in recent weeks with investors expressing more optimism than earlier in the year

"The equity IRRs of enhanced CLOs are nearly all in the bottom decile of the market"

Credit funds at a glance (August 2022)
A round up of fundraising and people moves in credit
   

Eagle Point expands into structured products including SRTs with big hire
Eagle Point Credit Management has hired a head of ABS, MBS SRT and specialty finance, in a move which underlines the firm’s progression from a CLO equity investor to a broader credit asset manager.

"The CLO that started the wave of prints and sprints paid near 20bp more than the market average"
It is possible to hit a home run with a print and sprint CLO, but execution is difficult  

CSAM does the CLO awards double
Winning the Creditflux Manager of the Year award is a feat in itself. Winning it back-to-back in such different markets is an outstanding achievement — and CSAM can take great pride in it

Single Bs return to US CLOs as issuers avoid par sub sting
Single B tranches have returned to US CLO structures, but with a new purpose

Eagle Point hires for defensive income strategy team
Eagle Point Capital Management has hired an associate, responsible for assisting the defensive income strategy senior investment team

"The CLO market can resemble a primary school soccer game, with everyone crowded around the ball"
The ability to refinance or reset a CLO is valuable, but there are friction costs to consider  

"Having tighter CLO debt costs will not be enough for brand names to outperform more agile competitors"
The drop in loan and CLO prices today is unlike any previous downturn — but again it will pay to be agile

"The reset market is open, but it doesn’t always make sense to extend the life of a CLO"
Strong secondary loan prices are making CLO liquidations a compelling option  

"This is the CLO market’s time to shine and prove it deserves to be a mainstream asset class"
The CLO market shouldn’t fear inflation — in fact, 2022 could be a very good year indeed

"We again have to flag up information in CLO marketing pitches that can mislead investors"
Cash-on-cash returns, default records and leverage statistics don’t always give CLO investors the full picture  

CLO pricing holds up against omicron as liquid credit takes a hammering
Being illiquid sometimes has its advantages, with the CLO market the picture of serenity as CDS swings imply volatility is afoot

"CLO equity investors have long accepted basis risk… but an off-market adjustment does not work"
The 26bp adjustment is disrupting the transition away from Libor — but market forces will prevail