Less credit volatility expected in Q4 despite US election fallout
CLO issuance was expectedly low in the final week of October in the run-up to the US election, as issuers brace for what has historically been a volatility-inducing macro-event. But prominent market participants say the unprecedented economic backdrop resulting from the pandemic means the outcome of the 2020 election is less likely to move the dial as much as in cycles past

CLO Census results: Citi comes out top but several banks make big leaps
Citi has been voted top in five out of the eight primary CLO categories as part of the 2020 Creditflux CLO Census, but BNP Paribas, Goldman Sachs, Jefferies and Natixis are among the banks that have made huge strides compared to last year

OC health check: CLOs wake up when September ends
September showed a slight but clear improvement in CLOs’ over-collateralisation test results as 182 CLOs breached an OC test during the reporting period, compared to 198 in August.

[update] Beneath the triple C: theme parks take portfolios on downward ride
Seven corporate debt issuers were downgraded to triple C or below in September by Moody’s or Standard and Poor’s – hurting $2.16 billion of US CLO loans and €1.16 billion of European CLO portfolio. The pace of CLO loan downgrades to triple C has slowed steadily since the peak in April

Senior bond-flex CLO tranches are 'cheapest bonds within securitised products': BofA
Triple A-rated notes of bond-flex CLOs are 'one of the cheapest bonds within securitised products', according to a new research paper by Bank of America

Libor floors and Volcker tweak bode well for future of CLOs
It’s been a truly miserable year, but amid all the despair covered so tirelessly by the mainstream media has been an omission; namely, that CLOs have withstood the damage caused by the pandemic

Banks employ tools to dig into CLO warehouse exposures
Credit analytics firm Oxane Partners has started a new business catering to the needs of CLO warehouse lenders, say officials at the company

Lagging CLO triple Bs draw investors
Senior US CLO spreads have retreated to their pre-pandemic levels, but triple and double B spreads have lagged - and those wider spreads are attracting new investors into the asset class

Methodology tweaks could prove a boost for CLO warfs
Moody’s proposed CLO methodology changes could impact 8% of US and European CLO tranches positively, the rating agency says

Fracking servicer FTS files for chapter 11 protection
Fracking servicer FTS International filed for chapter 11 protection in the US Bankruptcy Court for the Southern District of Texas Houston yesterday. The credit is not widely featured in CLOs with only nine managers holding $47.9 million of FTI’s term loans

Fair Oaks rotates to Euro CLO equity after 32% gain on double Bs
Fair Oaks Capital is starting to rotate back to CLO equity positions after taking advantage of the stabilising market and using profits from its higher-quality, more opportunistic trades earlier this year to carefully dial up the risk

Beneath the triple C: slowest downgrade pace puts market in recovery mode
The CLO market recovery is starting to benefit from borrower downgrades falling to their slowest rate since the coronavirus crisis began in March

Ellington winds down European CLO warehouse as PM joins rival
Ellington Management is winding down its European CLO warehouse with Barclays, while Ellington's European CLO operations lead has left for a rival firm

CLO equity claws back earlier losses to return 7.63% in Q2
CLO equity returned 7.63% in the second quarter on the back of leveraged loans rallying, according to Flat Rock Global's CLO equity index. Market prices have partially regained losses from Q1, in which CLO equity plunged by 30.41% following the coronavirus outbreak and the implementation of lockdowns globally

Loan leverage in CLOs has risen 1.3 turns, finds S&P
Leverage in US CLO portfolios increased by an average of 1.3 turns compared to the pre-covid-19 loan market, according to new research from S&P Ratings

Libor issue hurt Q2 returns on CLO investments, says Prospect's Eliasek
Prospect Capital Corporation's interest bearing investments generated an annualised yield of 11.4% in the second quarter, down 1% from the first quarter, the firm has revealed - with the decline in Libor to blame for the decrease in its CLO yields, management said on an earnings call today

The Last Tranche with Flat Rock's Bates: mid-market CLO equity proves advantageous in crisis
In this episode of The Last Tranche, Creditflux's Hugh Minch sits down with Flat Rock Global managing director Shiloh Bates. Topics include launching a new CLO fund, the advantage of middle market CLOs in a crisis, and why some risk retention fund investors' equity positions have underperformed

Beneath the triple C: CLOs get their sneakers on as retailers run into bankruptcy
July added further relief to CLO portfolios with the slowest rate of downgrades to triple C since March. US CLO portfolios faced downgrades of $2.18 billion to triple C while European portfolios faced just €59.13 million of such downgrades

Cut! Cineworld’s cancelled merger boosts CLO OCs
Investors in Cineworld’s $1.9 billion term loan breathed a sigh of relief in July after the UK cinema chain cancelled its merger with Canadian firm Cineplex, with holders repaid in full, according to market sources

Libor basis risk undermines Q3 CLO equity distributions
A technical issue for CLO Libor reset dates in April has hammered July equity payments, leading to a roughly 1% cut to equity cash flows for the second quarter