They said it: "Oh no, it’s that f***ing ESG thing again"
A conference attendee is heard voicing his displeasure that lines between CLOs and ethical investing are blurring

If you can stomach volatility, CLO equity is very attractive

Helicopter money is more productive than sponsoring the next bout of company share buybacks
The ECB is set to recommence its asset purchase programme, but what’s wrong with putting money directly into the hands of people?

Past returns: Unfinished business in CLOs
Five years ago in Creditflux we reported that DA Capital was looking for a way back into CLO management. The firm had sold its four US CLOs in 2011 to Citi Alternative Investments (now known as Napier Park Global Capital), but a rally had convinced the firm it was time to issue CLOs again. 

They said it: "CLO Euribor floors are in the money"
In a blog, TwentyFour Asset Management’s Aza Teeuwen says that Euribor floors are worth over 50 basis points of extra spread, but this is not being priced in.

Points up front: Loan deal with 23 takes Griezmann to Barcelona
Soccer financing firm 23 Capital has been adding credit experts to its team and now has a CLO specialist captaining its capital markets effort, with former Guggenheim Securities co-head of ABS/CLO syndication Sreesha Vaman joining last month. The squad already features credit portfolio managers Sam Filer (ex-BMS Finance), David O’Connor (Mizuho) and Ardeshir Sorabjee (Deutsche Bank).

Investors are very focused on ESG: it’s driving them and us, and rightly so
My career in credit began just over 20 years ago, working in KPMG’s restructuring team and advising banks on their troubled loans. It was a pretty steep learning curve as every company was teetering on the edge of bankruptcy. But I learned that controlling cash flow is vital and how to prioritise what’s most important about a company. I still use those same skills every day.

Past Returns: German direct lending’s overhaul
In Creditflux five years ago we reported on German fund managers campaigning against regulations which dictated that funds require a banking licence to act as direct lenders. In 2016 they got their way as the German Banking Act stipulated that the banking licence requirement would not be imposed if a direct lender was authorised under the Alternative Investment Fund Managers Directive.

They said it: "They are finally picking up the phone and making use of their rolodexes"
Bankers have been forced to reconnect with the broader triple A CLO buyer base now that Norinchukin Bank has stepped back, says a US CLO equity investor.

Points up front: Cap wearer plays trump card in support of SRT
Such has been the success of Donald Trump’s “make America great again” caps that structured credit folks have started sporting their own versions. Santander’s Jeremy Hermant has been seen in the streets of London proudly wearing a cap with the motto “make SRT great again”. Hermant works in the significant risk transfer team and tells Creditflux that he has been campaigning for SRTs for the past few years.

Points up front: Benefits of being unethical
Investing ethically is increasingly becoming part of a credit manager’s mandate, with environmental, social and governance (ESG) strategies all the rage.

Tourists have turned high yield into a sketchier neighbourhood… IG credit could be the answer
Using CDS to exploit roll-down in IG credit can generate good returns even in a low-rate environment

The IRR of CLO equity is driven by far more than just initial spreads
No one ever says the CLO equity arb looks great. But even in particularly challenging periods there are ways for equity investors to generate strong returns

What price lender integrity if myriad interpretations mean nobody knows where they stand?
Net short language is seeping into loan documentation. The problem is that some funds may not know their net position

They said it: "I saw a CLO OM which ran 484 pages"
At Creditflux’s Credit Dimensions event, JP Morgan’s Zaheen Mir argues that CSOs are simpler to understand than CLOs

There’s pain to come for those who have become too greedy
Stephen Catling of Connection Capital takes our credit quiz

The synthetic bespoke market could definitely do with the company of the rating agencies
It’s about time CSOs opened the door to the rating agencies — it would be good for investors and the agencies

PE hold periods have shrunk but fast acquisitions can lead to botched integrations
Buyout multiples are likely to stay high – but moving fast and specialising can help firms make money

Being fully invested can have a greater impact on IRRs than avoiding 2% defaults annually
The IRR differential can be as much as 3.3% for a fully invested CLO versus one that maintains a 5% cash balance

They said it: "We all suffer from the world views of millennials"
Headhunter Dale Shorey tells attendees at the Creditflux CLO Symposium about the difficulties of recruiting at the junior level

Spotlighting the original originator
Five years ago in Creditflux, we reported on the very first CLO originator fund being launched: Blackstone/GSO Corporate Funding.

Points up front: CLO awards banter
The Creditflux Manager Awards have a history of springing surprises. This year we had journalist and TV presenter Gavin Esler host the awards dinner and regale the audience with a Dolly Parton gag (the less said about that, the better).

Points up front: It’s getting hot in here
The role that journalists play in reporting on the CLO industry has been in the spotlight this year, with the mainstream press guilty of resorting to hyperbolic statements and fear-mongering. So it was a surprise to learn that these views were being given a public platform at IMN’s CLO conference last month on a panel titled Addressing the Headlines. 

I still love to sit in front of computer screens to try and understand markets
Jochen Felsenheimer of Xaia Investment takes our credit quiz

They said it: "Credit risk at that rating is basically non-existent"
Credit risk at that rating is basically non-existent