What CLO investors really need to know
From the drivers of CLO performance to cashflow modelling, these are the seven things every CLO equity investor needs to know. This article is an extract from Dealscribe and CLO Research’s guide What CLO Equity Investors Need To Know

Setting standards for emissions data
Macroeconomic trends may have pushed the topic of ESG reporting down the news agenda this year, but this is changing with a raft of new regulations in countries around the world

CLO Census: It’s time to put the shop in order
After a lacklustre year for the CLO market, the 539 respondents to our comprehensive survey are increasingly calling for structural changes, from electronic trading to standardised documents

European CLOs win out against US deals
Last month, our analysis explored the performance of US CLOs that were previously reset. We found that they delivered higher distributions than deals which weren’t reset, with the exception of the 2017 and 2018 vintages (Creditflux September 2023 — Do resets help CLOs perform better?). This article expands that analysis to the European market, and compares the performance of US BSL and EU CLO equity tranches.

Primary market roars into life
The primary CLO market pickup that started in August continued strongly in September, both in Europe and the US. Although the overall direction was the same on both sides of the Atlantic, the type of activity was quite different.

What do you think?
The Creditflux CLO Census is back for its seventh instalment. Our annual stock-take of the global CLO industry begins on Monday, 2 October — it’s your chance to make your voice heard

The Italian connection
As Octagon and Conning come under the umbrella of large Italian insurer Generali, we spoke to the firms’ CEOs about their expectations for credit in general and their firms in particular

All change, please
This year has not only seen the fall of Credit Suisse, but also the arrival of two fresh faces — Scotiabank and CIBC — triggering a wave of hiring that has some way to run.

Fund performance
Good month for CLO funds sees six in top 10 as Axiom sets pace

Credit hedge funds
Credit hedge funds performance data

Credit funds at a glance
Fund performance, fund raising and LP commitments

CLOs at a glance
New CLOs this month

Fund performance
A roundup of fund performance

Rope-a-dope brings knock-out returns
Post-pandemic US and European CLOs delivered mid-teen equity returns in 2022, despite a barrage of weak macroeconomic news and what could have been a heavyweight Libor mismatch  

We made the most of a tricky situation
The contrast between 2021 and the following 12 months could not have been starker. But although some heavy hitters remained on the sidelines, 94 US CLO managers priced new deals in 2022

Not every CLO can be a winner
The CLO industry has undeniably performed well enough to justify the plaudits it receives. But there will always be some unloved CLO tranches that slip into triple C territory

Weren’t there more of us than this?
According to this year’s Creditflux CLO Census, the CLO industry is not feeling optimistic. Some investors have vanished and managers have not taken advantage of helpful market conditions

We can cope with downgrades again

Can someone call the triple A? We’ve stalled
CLO issuers are in need of AAA roadside assistance. Despite the emergence of new buyers, a lack of senior CLO investors — particularly US banks — has brought the primary market to a halt  

Arb work pays off
With day-one arbitrage alone delivering projected CLO cash-on-cash returns of 20-25%, 2021 may have been the best year ever for equity investors — at least until CLO spreads began to widen  

HY fund is exception to rule of CLOs
CLO funds have had back-to-back years of outperformance versus credit, proving the asset class is a great place to invest, rain or shine. But a Wasserstein HY fund was the star performer in 2021  

I’ll see your 2020 and raise you 2021
Discounted loans, Libor floors and bond flexibility helped make 2021 an even better year for CLO returns than 2020, as US CLOs distributed 15.54% and European CLOs paid 13.93% annualised

A fresh approach to loss distribution
Considering how cash balances change over time, loss distribution models can look very different to conventional thinking. So is your CLO’s pricing based on incorrect assumptions?  

These CLO docs could be better
It seems there’s not much to worry about if you’re in the CLO market. In Creditflux’s CLO Census, voters said docs should follow a template as Jefferies, AGL and Hayfin emerge as rising stars

An alternative way of looking at CLO overlap
Analysing CLO collateral to look for overlap is critical for any CLO investor, but it is normally done either within a portfolio of CLOs or by bilaterally comparing two managers. In one of its latest research pieces, Moody’s Analytics has taken a different approach