CLO managers favour tech, cable and healthcare as loan downgrade fears dominate, finds JP Morgan
Picking safe sectors to buy in the coronavirus crisis is a tough call, but CLO managers variously favour technology, cable/satellite and healthcare, according to a JP Morgan survey. There is much more consensus on dumping autos, energy, gaming/lodging/leisure and retail

S&P adds to CLO negative watch list as loan downgrades pick up
Standard & Poor’s has added to the list of tranches in CLOs it has on negative watch as coronavirus concerns mount. This follows the rating agency last week highlighting 22 tranches across 15 US CLOs for having big exposure to downgraded corporate borrowers across impacted industry sectors

Fitch puts European and US CLO notes on negative watch after coronavirus stress test
Fitch Ratings has placed six notes from one European CLO, one US static CLO and one US middle market CLO on negative watch, following coronavirus-related stress tests placed last week 

Last chance to get Crediflux newsletter delivered to your door
The last few weeks have affected the way everyone goes about their daily routine. To make things slightly easier for our readership, we can send the April Creditflux newsletter to subscribers' home addresses - simply fill out the form

30% of CLOs will breach their 7.5% triple C buckets, says BofA
The number of CLOs tripping their 7.5% buckets for loans rated triple C is set to soar from 8% to around 30%, according to the latest research from Bank of America

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Elizabeth Warren demands data on tanking lev loan market
US senator Elizabeth Warren has requested leveraged lending data and detailed information about the risk posed by loans, having aired her concerns about covid-19's impact on this market in a letter to treasury secretary Steve Mnuchin

CLOs pressured by sub-80 loan index as UBS predicts $550 billion of distress
CLOs were squeezed again today as the coronavirus selloff continues to hammer the loan market and UBS predicted many leveraged loans will become distressed

CLOs process Internap bankruptcy as they hold $212 million
CLOs hold $212 million of the debt of Internap Technologies, which filed for Chapter 11 in the Bankruptcy Court for the Southern District of New York on on Tuesday

CLO new issues shut down as market digests fiscal stimulus measures
The CLO and loan pipelines have dried up as managers and investors shift their focus to trading, according to market sources

Loan index drops below 90 for first time since February 2016
The S&P/LSTA leveraged loan index dropped below 90 today as the coronavirus pandemic continues to wreak havoc on the world's financial markets

Beneath the triple C: mighty CLO buckets from Akorns grow
Rating agencies went on a downgrading spree in February, with Moody’s and Standard & Poor’s cutting 20 corporate names to triple C or below – affecting $2.78 billion of paper in US CLOs and €316.6 million in European CLOs. 

Loan market slump feeds into CLO pricing
The loan market opened this week 2-4 percentage points lower than last week, pushing it toward 90—a threshold it has not crossed since February 2016. CLOs have reacted to this rapid drop

Fed cut triggers Libor floors on third of US loans
Roughly a third of US loans effectively became fixed rate investments this week as Libor edged below 1% for the first time since January 2017

ESG pervades US CLOs but screening approach divided
Environmental, social and governance (ESG) investing is reshaping the US CLO market, with February bringing the first CLOs marketed that have explicit ESG-related investment criteria.

Managers seeking bond buckets will need high yield track record
US CLOs could soon be permitted to buy corporate bonds amid an overhaul of the Volcker rule, but market sources say that in the short term bond flexibility is a luxury that will only be afforded to a select group of CLO managers.

European CLO managers with big bond buckets do best, finds Bank of America
European CLO managers that trade in the secondary market and hold a higher percentage of fixed rate assets are likely to outperform their peers, Bank of America finds in latest research

CLOs dock $100 million of Pier 1 as it plunges into Chapter 11
CLOs hold just over $100 million debt of Pier 1 Imports, which filed for voluntary Chapter 11 in the US Bankruptcy Court for the Eastern District of Virginia yesterday 

CLOs feel flat after housing $335 million of bankrupt RentPath
CLOs house $334.5 million of the debt of RentPath Holdings, which filed for Chapter 11 in the US Bankruptcy Court for the District of Delaware on Wednesday

The Last Tranche with Octagon’s Lam: 2017 CLO refis and ‘no man’s land’ in loans
Spreads, investors and manager consolidation take focus in February's edition of The Last Tranche

Licence and registration: loan spreads get speeding ticket as CLOs play catch-up
The sharp rally in corporate credit means that CLO spreads are going to have to rapidly follow suit with investors informing Creditflux that US CLO triple As should be pricing at 105-107 basis points to make deal economics work. 

McDermott slips into bankruptcy with CLOs holding almost $1 billion
42 CLO managers hold $957.6 million of the debt of McDermott International, which filed for Chapter 11 bankruptcy on Tuesday. Under the plan, McDermott’s term loan and revolving lenders will receive 94% of McDermott’s reorganised equity and $500 million in take back senior secured term loans. Term loan claims are expected to recover 84%, according to a disclosure statement 

36% of US loans could be repriced amid rally, finds Nomura

Nomura calculates that about 36% of loans are eligible for a repricing. It bases this on the number of loans that are immediately callable, have near-term call risk or are a potential call risk if the loan market continues to rally

CLOs face losses as Constellis loan drops to 28.5
32 CLO managers hold $640.4 million of Constellis Holdings’ debt, which Moody's downgraded to C after the company missed an amortisation payment due 31 December