Are we ready for another crisis?
Credit managers must brace themselves for stress in 2023, as rates rise and the number of poor performing assets increases. But most CLOs look well-placed and can rely on plump OC cushions 

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

Fund performance: Light at the end of the tunnel for credit funds after difficult year
Following a tough September, credit funds bounced back in October as 59% of funds made positive returns.

Credit hedge fund returns (December 2023)
Credit hedge fund returns

Manager looks to cut HY exposures in CLO-heavy credit interval fund
A credit fund manager has provided a performance update on is multi-strategy closed-end credit fund through regulatory filings, revealing it has beat its benchmark from 1 April to 30 September despite losing 13.66%

European CLO managers trade loans to avoid (par) burn
Between March and July, European CLO managers traded €21 billion of assets within CLOs that were still in their reinvestment period as opportunities arose amid a weaker macro environment and Russia’s war with Ukraine

Plenty more US CLOs in the CCC as buckets pass 5%, finds S&P
US CLO triple C baskets have nudged to 5.02% in November from 4.4% the prior month

"CLOs could withstand another 13.4% of downgrades to triple C if the price drops to 50"
CLOs are well positioned, even if there are mass downgrades to triple C  

Apollo scooped up $1.1 billion CLO paper amid UK LDI crisis, officials confirm
Apollo Global Management bought a whopping $1.1 billion of triple A and double A-rated CLO paper yielding over 8% in the three weeks of elevated bwic supply in October

Past returns: Alhambra CLO paves the way
Five years ago in Creditflux, we reported that Be-Spoke Capital was launching the first SME European CLO since the financial crisis.

Points up front: CLO managers didn’t take advantage of volatility, say CLO managers
Creditflux’s CLO Census shows CLO managers can be hard on themselves

US CLO equity payments drop to lowest since covid
US CLO equity payments have taken a hit in October due to a mismatch between one-month and three-month Libor and Sofr. 65% of loans in US CLOs reference one-month Libor, whereas all liabilities pay from three-month Libor or Sofr.

Fund performance: Wake us up when September ends
After a resurgent August, credit markets hit a rough patch in September, with every Creditflux index posting negative returns, and only 12.9% of funds in our listings showing a positive return.

Credit hedge fund returns (November 2022)
Credit hedge fund returns

CLOs can weather a short recession, but maybe not a long one, conference hears
The US economy is likely to enter a recession in the first half of 2023, attendees at IMN's ABS East conference heard on Tuesday. While the severity of the downturn is unknown despite the Federal Reserve aiming for a 'soft landing', CLOs are well positioned to weather the storm - as long as the recession is contained in a relatively short period

Leveraged loan issuance unlikely to return in force until late 2023, conference hears
The leveraged loan primary issuance pipeline is headed for an elongated pause and primary loan activity is unlikely to return dramatically until late in 2023, attendees at IMN's ABS East conference in Miami heard on Monday

US managers recalibrate as Euro CLO portfolio spreads rise: Moody's
CLO managers have had to readjust this year and data from Moody’s Investor Services shows weighted average rating factor scores for all US CLOs have held steady, while weighted average spreads have dropped 0.15%

What matters is what you do with it
CLO managers yearn for flexibility so they can take advantage when credit sells off. But it isn’t enough on its own: triple C-flex CLOs saw portfolios erode this year, while CBOs outperformed

Warning signs flash as B3 share of loans reaches record level
Credit analysts are sounding the alarm as the portion of the loan and high yield universe rated B3 or B- surged to a record level in the third quarter

Fund performance: August provides much-needed relief for CLO funds
.August fund performance 

Credit hedge funds (October 2022)
Credit hedge fund returns

   

Points up front: Exhibit A: every single CLO slide deck ever
In a recent note, the National Association of Insurance Commissioners said they needed “more data to showcase that CLO pools have outperformed the loan market”

US CLO syndication returns after long layoff as triple As settle tighter
After months where CLO liability pricing lagged the loan market, September saw a reversal as a vibrant investor base helped CLOs outperform

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

Boston-based investor looks to sell entire equity tranche of 2020 PGIM CLO
An unusual equity position is on sale on the secondary market today at 9.30am EST (2.30pm London time) as the entire equity tranche of Dryden 83 has been listed