US CLOs thrive as managers embrace secondary loan market
Leveraged loan issuance is supposed to feed and keep CLOs healthy, but a 62% slowdown in US loan volumes this year was accompanied by average CLO equity distributions ticking 19% higher.

Investors seek oasis as new issues dry up

Euro CLO managers ditch Moody’s as negative views rise
European CLO managers have begun turning against Moody's as it has rapidly increased the number of loan issuers it has placed on negative outlook.

Rival manager’s warehouse contributes to new CIFC US CLO
CIFC Asset Management has had a productive year after pricing four new issue US CLOs but sources say that the manager’s latest deal, CIFC Funding 2019-IV, owes a lot to another CLO manager.

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.

Direct lenders accused of exaggerating terms in lender education
Sources say that some direct lenders in Europe are submitting standard indicative lender terms with limited or no internal discussions with their respective credit committees.

Borrowers promise to pay penalty if they breach ESG targets
Loan investors are incentivising companies to improve their environmental, social and governance (ESG) performance by linking the financial terms of a loan to the ability of the borrower to meet predetermined sustainability targets.

European loan trading: CLO managers snack on Ifco loans
35 CLO managers were holding €364.2 million  €364.2 million of IFCO’s loans in April – all at par

US loan trading: CLO managers on cloud nine after Ultimate Software allocations
CLO managers took down about 27% of Ultimate Software's loans in April, when the cloud operator issued its $2.3 billion first lien term loan due 2026, according to CLO-i

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

Budge up, more new managers are coming

Market bemoans Europe’s lack of CLO manager tiering
Manager tiering became a hot topic in Europe again last month following Credit Suisse Asset Management’s decision to break with tradition by syndicating its triple A notes in Madison Park Euro Funding XIV, rather than place the notes with an anchor investor.

Cayman Island hopping: EU laws provoke switch in CLO listings
The Cayman Islands Stock Exchange (CSX) is set to become the listing place of choice in 2019 for CLOs put together by US managers — at least, according to a bold prediction by law firm Harneys.

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

Doing CLOs is hard work as recovery lags
There’s scrutiny on staffing, structures and, of course, ‘the challenging arb’. But Q4 volatility created opportunity, which led speakers at the Creditflux CLO Symposium to ask for more

Baird targets CLO arranging business
A New York brokerage with a CLO trading business is making a pitch to be the first debut arranger of the year. According to market sources, RW Baird has hired CLO origination specialist Mario Verna with a view to building out a CLO primary business. In March, Verna left Guggenheim Securities, where he served on the CLO desk as a managing director.

High yield bonds regain lost ground

Gateway sees an opening for CDOs with flexible mandates
Gateway Credit Partners is taking an unconventional route towards building a corporate credit management platform by creating its business around CDOs

Loan trading round-up: CLO managers fall out of love with First Data
An analysis of loan trading among CLO managers in February shows that First Data is falling down the pecking order with managers selling $182 million of the company's loans

Large, liquid loans aren’t always perfect
CLOs could be forgiven for rushing to buy Refinitiv loans — after all it was the biggest LBO since the crisis. But some large managers have abstained, while others have bought opportunistically

Moving on from the late 2018 hangover
It might be too early to call a full recovery, but it’s fair to say that the US loan market is back on track with $48 billion of institutional issuance in 2019 — 88% of which is made up of new issues

Regulation stifles SRTs, but banks and investors revel in quarter-four outperformance
Over the course of 2018 there was roughly €6.5 billion of issuance in the market for significant risk transfer (SRT) deals, sources say, with the last three months understood to be the busiest quarter on record

Loans recover slightly after late-2018 havoc
Secondary loan prices have ticked higher this year, although they are still some way off the levels reached before the fourth quarter slump. However, M&As are starting to fill the new issue pipeline
 

Loan sell-off leaves some CLO warehouses out of the money
The December sell-off in the loan market may have been good for CLO equity but it left many warehouses out of the money, according to several sources

Tail wags dog as European CLOs' 108bp benchmark drags loans
European CLOs usually price on the back of where underlying loans are printing, but this year the reverse looks to be true