Asset managers pull all liquidity levers to satisfy borrowers
A paramount concern for many investors in direct lending funds is whether asset managers have enough liquidity to meet borrower requests for funding

Structured credit dragged very wide — but CLOs stand to gain
Senior tranches of securitisations widened 220% in less than a month as the coronavirus pandemic has meant an increase in systemic risk — a sharp turnaround from the past few months when idiosyncratic risks were being cited as the main concern for structured credit investors.

‘Hoard credit’ says PM as markets swing
As Creditflux went to press, the covid-19 death toll in Italy surged by 700 after two days of slowing, and the US congress agreed a $2 trillion stimulus package.

Fair Oaks suspends dividends from listed CLO fund citing covid-19 uncertainty
Fair Oaks Capital has suspended dividends on its listed CLO fund “in light of the ongoing uncertainty in economies and markets caused by covid-19 pandemic”, according to an update to investors in the $315 million fund

BDCs face asset coverage pressure as Fitch puts two on negative watch
Fitch Ratings has placed ratings on the debt of two business development companies, BlackRock Capital Investment Corporation (BB+) and New Mountain Finance Corporation (BBB-), on negative watch

US loan index rises for second consecutive day
The credit markets felt some reprieve on Thursday as the S&P/LSTA index rose for the second consecutive day, rising by an unprecedented 3.33%

Silver lining: credit investors provided with lower entry points than Q4 2018
Oil shocks and the coronavirus outbreak, along with aftermath effects such as US Federal Reserve interventions and lockdowns, is providing credit investors with lower entry points than the Q4 2018 sell-off, say sources. Furthermore, an expected U-shaped rather than V-shaped recovery could provide a greater money multiple for opportunistic investments - if they can access them 

CVC listed credit fund 'pre-emptively' sheds covid-19 related positions
CVC Credit has taken a conservative approach to addressing covid-19 volatility in its listed opportunistic credit fund, with the fund divesting several credit positions to manage risk 

Time on side of direct lenders as private loans give relief against volatility
Some credit fund managers have become myopic in an effort to absorb the impact of the market sell-off, rate changes, shortage of liquidity and the overarching consequences of the coronavirus pandemic. Mid-sized companies might be considered more vulnerable in such circumstances, but direct lenders are spared from any mark to market volatility

Direct lenders face ebitda-add back language challenges as borrowers seek flexibility

Solus shutters flagship distressed fund, WSJ reports
Solus Alternative Asset Management has shuttered its flagship distressed debt fund, Sola, as the firm faces big redemption requests and coronavirus-related liquidity issues

Bluestem bankruptcy hits $106 million of CLOs
CLOs hold $105.7 million of the debt of US retailer Bluestem which filed for Chapter 11 bankruptcy last week, according to the latest trustee reports from CLO-i. 

Credit managers hunker down as idiosyncratic risks persist
A slew of earnings reports from credit managers and business development companies shows that deal-making and performance are robust, but great importance is being placed on credit selection.

Fortress digests CraftWorks bankruptcy
CraftWorks Holdings filed for Chapter 11 bankruptcy yesterday, with Fortress Investments holding all of the Tennessee restaurant operator's first lien debt - of which over half is in middle market CLOs. The New York-based firm has submitted a “stalking horse” bid to buy CraftWorks' assets

Weak loan collateral will dent private credit returns, says Finnish pension
Valtion Elakerahasto, the state pension fund of Finland, says non-existing or weaker loan collateral has raised concerns about the returns private credit funds will generate in the coming years  

CLOs show coronavirus resistance even as bonds and loans suffer
CLO managers are - so far - looking defensively positioned in relation to the coronavirus outbreak, with only two of the five largest portfolio sectors listed as very negative in latest Wells Fargo research. But investor fears have all but closed the loan and bond primary pipeline, while lower rates signalled by the US Federal Reserve could spell a fall in leveraged loan and CLO demand

S&P prescribes Akorn with triple-C rating amid possible bankruptcy
Akorn, a pharmaceutical company, has been downgraded to triple-C by S&P, following the announcement that Akorn has agreed plans to sell all its assets to repay debt as part of its standstill agreement extension

Hadrian Wall tumbles as board calls for wind down of direct lending fund
Hadrian’s Wall Secured Investments' board of directors has decided that a wind down of the fund with cash returned to shareholders would be in the best interest of shareholders, according to a company update

Credit Rendezvous: the outlook in 2020 across a dozen segments of the credit market
Welcome to the Credit Rendezvous, the first instalment of a regular feature published by Creditflux that tracks credit market dynamics in a dozen segments from investment grade, liquid loans, CLOs and CSOs all the way through to distressed debt. We view this as the meeting point for credit specialists across strategies to share their perspectives

York liquidates credit opportunities fund following redemption requests
York Capital Management has decided to liquidate its 2011 vintage credit opportunities fund following what it termed 'significant redemption requests'

Bifurcation in loan market will continue in 2020, says MUFG
Bifurcation in the leveraged loan market, a trend that dominated the market in 2019, looks set to continue in 2020, according to MUFG’s co-head of debt capital markets Jeffrey Knowles

Not energy efficient: manager to liquidate energy credit ETF as AUM stalls
Purpose Investments is shutting down its exchange-traded energy credit fund due to “low assets under management” and the associated cost-difficulties of managing such a fund

Partners nears $100 billion in AUM as CLOs drive private debt growth
Swiss manager Partners Group has reached $94.1 billion in assets under management, with CLOs boosting the firm’s growth, according to its 2019 annual results  

CSO arrangers look to build on $65bn of issuance in 2019
The synthetic bespoke tranche market this year has fallen short of expectations in terms of overall issuance volume, but ends with transformative inroads being made.

Falling correlation reignites passion for index tranche trades
Dispersion in the global corporate credit market is rekindling interest in correlation trading, with dealer sources reporting that a late surge lifted 2019 index tranche volumes to $250 billion.