OC health check: US CLOs hit by new round of test failures
135 deals breached an over-collateralisation test last week, 78 for the first time, according to the latest trustee reports from CLO-i.

Bankrupt Hertz runs out of gas with CLOs holding $245 million
CLOs hold $245 million of Hertz’ debt as the US-based car rental company drives into bankruptcy protection, with the coronavirus panedemic putting brakes on the Estero, Florida-headquartered's firm car rental operations

Akorn falls into bankruptcy with $321 million planted in CLOs
CLOs hold $321.3 million of specialty pharmaceutical company Akorn’s debt, according to the latest trustee reports from CLO-I, with the firm having filed for chapter 11 protection in the US District Court for the District of Delaware yesterday

Fair Oaks spends on junior European CLO debt after raising funds
Fair Oaks Capital has invested $92 million in junior CLO debt tranches since the start of April after putting to work fresh commitments to CLO investment fund Fair Oaks Limited

CLOs seek ways to work around warf restrictions
Corporate downgrades leading to par haircuts in CLOs have been a primary focus for CLO investors since the start of the coronavirus-induced crisis. But one of the side effects of rating actions has been a rise in weighted average rating factor test failures

JC Penney bankruptcy weighs on CLO and CDX HY baskets
CLO managers hold nearly $250 million of the debt of JC Penney, which filed for chapter 11 protection in the US Bankruptcy Court for the Southern District of Texas on Friday

$350 million of CLO collateral drips into default as oil companies file for Chapter 11
CLOs hold $353 million worth of debt of two oil and gas companies - Ultra Petroleum and Gavilan Resources - which have become the latest casulties of the precipituous decline in oil prices. The pair filed for chapter 11 protection in the US Bankruptcy Court for the Southern District of Texas on Thursday and Saturday, respectively

US pension forms $100 million talf sub-committee as 'window of opportunities closing quickly'
Fresno County Employees Retirement System has formed an ad hoc committee authorised to commit up to $100 million to a term asset-backed securities loan facility strategy, according to an audio recording from its 5 May board meeting

Apollo and Barings defer equity payments on long-dated CLOs
Apollo Global Management and Barings have joined PGIM in deferring their scheduled April payment dates for a handful of European CLOs, according to the latest payment reports on CLO-i. Apollo also deferred payments on several of its US CLOs.

Listed CLO fund rebounds in April with 5.7% gain
US and European CLO equity tranches brought in gains of 10% in April for the fund, US CLO debt 12.1%, ABS 0.6% and bank balance sheet transactions 0.3%

CLOs hold $100 million of Intelsat debt as it files for bankruptcy
CLOs hold nearly $100 million of the debt of Intelsat, a Luxembourg-headquartered fixed satellite services provider, which filed for chapter 11 protection in the US Bankruptcy Court for the Eastern District of Virginia late last night

First Creditflux web panel discusses outlook for CLOs amid covid crisis
Panellists at the first ever Creditflux webinar conference on CLOs struck a balanced view on the outlook for their market, highlighting crucial differences between the crisis resulting from the coronavirus pandemic and the global financial crisis of 2008

Beneath the triple C: April showers send buckets overboard
Downgrade waves rocked the CLO market in April as Moody's and Standard & Poor's downgraded 135 corporate borrowers to triple C or below, from ratings above that level. The downgrades put CLOs in rough waters as $41.6 billion of such loans are prevalent in US CLOs while €5.64 are moored in European CLO portfolios – affecting 5.92% of the US market and 4.37% of the European market

Where are the gloating I-told-you-so columnists who claimed CLOs would bring global destruction?
We have seen a measured response to the coronavirus crisis: fund managers aren’t collapsing and investors are not shunning CLOs

Liquidity is king. A company with a sound long-term value proposition may not last the next few weeks
For borrowers — and credit providers seeing revolvers drawn down — liquidity is the greatest concern

Sculptor doubles global credit exposure in master fund amid dislocation
Sculptor Capital Management has doubled its global credit exposure in its Master Fund during the covid-19 volatility, according to the firm’s Q1 earnings call

CSOs are hurting but will emerge stronger, say sources
It is unsurprising that bespoke synthetic tranches have suffered during the covid-19 crisis, as they are backed largely by real money investors that have gone outright long credit risk. But more noteworthy and reassuring, say sources, is that most have held firm in their positions and look set to stick with the asset class — in contrast to the 2008 global financial crisis exodus

Looming CLO downgrades will not force insurers to sell despite seven-point trading basis
Insurance companies are unlikely to be big sellers of CLO paper, despite the threat of mass downgrades as rating agencies last month put over 1,000 global CLO tranches on negative watch

CLO managers seek to defer and redirect equity distributions
Half of US CLOs are due to miss equity payments as downgrades and defaults resulting from the lockdown economy trigger overcollateralisation breaches across the market, according to the latest bank research estimates. But some managers are being granted the flexibility to redeploy cash

KKR takes covid-19 hit on flagship credit funds and lev fin
KKR took a 16% hit to returns on its alternative credit flagship funds amid the first quarter coronavirus downturn and a 13% loss on leveraged credit, taking these into negative territory for the last 12 months. The firm's private equity portfolio also slumped by 12%

Ares raises $3 billion special situations fund ahead of huge European direct lending launch
Ares Management has witnessed “accelerated fundraising” for its special situations fund, which it has closed at around $3 billion, according to the firm’s earnings calls. The firm also launched its fifth European direct lending fund this week, which Ares expects could be “the largest private comingled fund in its history”

Flex CLOs tap mass downgrades to fill big triple C buckets
CLO managers are being hampered by the sheer volume of corporate credit downgrades to triple C, leaving the small cluster of triple C-flex CLOs to capitalise

Creditflux announces finalists for online CLO awards
Creditflux is pleased to announce the finalists for a new-look manager awards event, which will be hosted online for the first time.

Past returns: Death by triple Cs? A step too far
15 months ago in Creditflux we reported that corporate credit downgrades, rather than defaults, were the biggest problem facing CLO portfolio managers

Points up front: Liquidating CLO can’t escape Standard & Poor’s
With over 1,000 CLO tranches on watch across the big three rating agencies, it’s good to see rigorous standards are being maintained and little things like CLO liquidation are not excusing deals from detailed scrutiny