Creditors look to block asset stripping in loan docs
Loan managers are using their increased negotiating leverage amid tighter credit conditions to push back on private equity sponsors’ ability to asset strip portfolio companies

US loan index falls below 92 to almost wipe out gains since July
The S&P/LSTA Leveraged Loan Index sank to an average bid of 91.92 cents by Monday, down by two points in as many weeks, wiping out almost all the gains seen in the late-summer market rally

Nerves of steel needed for CLOs as Phoenix Services files for chapter 11
CLOs hold $341.54 million of steel service provider Phoenix Services Topco which filed for chapter 11 protection in the US Bankruptcy Court for the District of Delaware yesterday

CLO OC ratios tick higher in US, but August defaults add pressure: Fitch
Senior and junior overcollateralisation test cushions in reinvesting CLOs increased to an average of 9% and 3.9% respectively after a string of issuers defaulted in August, according to Fitch Ratings

European IG CLO mezz is attractive versus US paper: Barclays
There is no reason for European CLO mezzanine tranches to be as wide as they are versus equivalent US paper, according to a strategy note from Barclays.

Judges rule in favour of Citi in overturning Revlon decision
Citi has won its appeal against Revlon creditors, forcing a consortium of asset managers to return more than half a billion dollars received in an accidental transfer in 2020

Beneath the triple C: US CLOs take a dip in the triple C as Europe watches from the sun lounger
The US CLO market bore the brunt of downgrades to triple C in July and August, with a total of $6.22 billion of paper affected. European CLOs enjoyed a more relaxing summer holiday, with only 1 name representing €33.88 million worth of bonds downgraded to triple C.  

Cineworld buys ticket for DIP facility with chapter 11 filing
Cineworld filed for Chapter 11 in the US Bankruptcy Court For The Southern District Of Texas on Wednesday, less than a month after the UK-based cinema operator announced Chapter 11 was among the options it was considering to “achieve its restructuring objectives”

B- share of CLO portfolios rated by S&P hits all-time high after 30 downgrades in a month
The share of CLO portfolio assets rated B- by S&P hit an all-time high of 29% after 30 loans were downgraded in August

CLO engine sputters as loan recovery hits road block
US CLO issuance suffered a precipitous decline in August as firms struggled to adjust to the new pricing landscape

Three defaults mean CLO OC ratios to decline by 17bp in September, says BofA
CLO overcollateralisation ratios are set to decline by 17 basis points in September following the defaults of Cineworld, Endo and Carestream health, according to a research paper from Bank of America

Secondary CLOs stand firm as credit markets take a hit
Macro weakness is seeping into credit with CDS indices gapping wider and US loans suffering a setback after dropping below 95 points this week. Traders say the CLO secondary market has reflected this turn in sentiment, with did-not-trades racking up – although spreads have held up better than other parts of the credit market

The Last Tranche with Octagon's Nechamkin: Investors were selling the larger loans that were easier to sell
In this episode of the Last Tranche, Mike Nechamkin, chief investment officer and senior portfolio manager at Octagon Credit Investors, discusses the reasons behind the recovery in loan prices in recent weeks

CLOs keep eyes glued to screen as Cineworld previews possible chapter 11
Cineworld, the UK-based cinema giant, has announced that a chapter 11 restructuring is among the options it is considering, in response to recent media speculation about a possible default

Widening asset/liability gulf will hurt CLOs: Barclays
A mismatch between CLO asset / liability rate risk is increasing in the US as more leveraged loan issuers opt for one-month pay frequency, Barclays credit strategists have found

Quick! Avaya has ignited and $1 billion of CLO assets are at risk
Sparks are flying in the leveraged loan and high yield market after communications company Avaya Holdings slashed its forecasted earnings mere weeks after syndicating new debt. The rapid decline of Avaya's debt has left CLO managers little time to avoid the blaze

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

S&P revises US CLO stress tests to include recession-based scenarios
Standard and Poor’s has published revised stress test scenarios on the US broadly syndicated loan CLO market in light of increasingly negative market sentiment

Short duration CLOs are putting reset risk in the post: Barclays
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

Lenders fume over Avaya ebitda miss weeks after issuing loans
Avaya’s lenders are considering legal options after the company slashed its ebitda projections just a few weeks after issuing a $350 million term loan paying Sofr plus 1,000 basis points

Pattern of loan sell-off implies widespread uncertainty
A quirk to the June loan dip was that industries and rating bands sold off in parallel

CLO market mood sours amid bitter economic outlook

US manager launches CLO and loan funds with $150 million seed capital
A Dallas-headquartered manager has secured $150 million in anchor commitments for a new US CLO fund and leveraged loan fund

FinDox steps in on climate disclosure reporting for CLOs
FinDox has become involved in reporting on carbon data for ­climate-related financial disclosure regulations, having been mandated by leading CLO managers to source relevant ESG key performance indicators

Beneath the triple C: ebbs and flows leave triple C levels at a temporary stasis
Following a rising tide of downgrades in May the loan market stabilised somewhat in June, with seven issuers held by CLOs downgraded to triple C and a counter-swell of five names upgraded to single B.