As high rates hurt borrowers, private credit firms are hoping for an uptick in M&A
2020 vintage investments have distributed more than 80% less cash

Relative to Airbus, Boeing was long accountants but short engineers
A qualitative approach can help investors spot boards that are too focused on short-term returns

"A bit ‘woke’? Possibly. But true corporate sustainability derives from sound governance"
Silicon Valley Bank’s collapse underlines the importance of sound governance

Past returns: US firms become Euro CLO issuers
Five years ago in Creditflux we reported on CIFC Asset Management and Voya Investment Management harbouring European CLO ambitions as US issuers became accustomed to risk retention.

CSAM does the CLO awards double
Winning the Creditflux Manager of the Year award is a feat in itself. Winning it back-to-back in such different markets is an outstanding achievement — and CSAM can take great pride in it

"Faltering oil supply is lamentable at a time of strategic and moral shortfall"
We need to accept the pain and cut dependence on Russian oil today

"The loan market is the septic tank for sub-single B LBO financing"
Portfolios of single name IG CDS are less complex and more liquid than CLOs

"This is the CLO market’s time to shine and prove it deserves to be a mainstream asset class"
The CLO market shouldn’t fear inflation — in fact, 2022 could be a very good year indeed

Past returns: Prophet’s early CLO redemption
In Creditflux five years ago, we reported that Prophet Capital, the control equity investor in Covenant Credit Partners CLO I, had driven liquidation of the deal

A brighter year ahead
Panellists on Creditflux’s CLO webinar described how CLO spreads are close to historic tights, ESG is entering the docs and managers have more flexibility with work-outs than ever before

The tide has turned… the solution for investors is to move into floating rate loans
2020 was the year of fixed-rate bonds, but treasury curves are steepening and demand for loans is heating up

Speculative protection buying censures managements that seek only to enhance their own wealth
The Catholic church misses the mark when referring to CDS as ‘finance of chance’

Cessation of activity mid-December is an opportunity to switch off… and let the mind wander
Welshcake is grateful for a lull in credit markets. The downtime has inspired him to dream up a CLO play

The opportunities to build par and spread within a CLO haven’t been this plentiful since 2009
Last year’s CLOs could become the benchmark for manager performance

Past returns: Would-be CLO buyers turn sellers
Five years ago in Creditflux, we reported that the new generation of US 2.0 CLO managers were striving to grow their CLO AUM through manager acquisitions; namely, Benefit Street Partners and Triumph Capital Advisors, the pair having issued their debut CLOs in 2012 and 2014, respectively.

Regrettably, a small number of CLO debt investors insist on ‘hardcoded’ Sofr replacement provisions
Sofr looks like the most likely candidate to replace Libor, but it is still risky to write it into CLO documentation

Considering the variables over the life of a CLO, a drop in Libor is a relatively modest risk
Changes in Libor do not have a major impact on CLO equity cash flows or equity yields

Tourists have turned high yield into a sketchier neighbourhood… IG credit could be the answer
Using CDS to exploit roll-down in IG credit can generate good returns even in a low-rate environment

The IRR of CLO equity is driven by far more than just initial spreads
No one ever says the CLO equity arb looks great. But even in particularly challenging periods there are ways for equity investors to generate strong returns

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

Just because there have always been loan fees doesn’t mean they are the right way of doing things
Scrapping loan transfer costs of up to €3,500 per transaction is a bridge Europe should cross for the sake of liquidity

Q4 2018, which had loan price volatility without defaults, was close to nirvana for CLO investors
The current vintage of CLOs could be the best ever if the volatility in Q4, when retail funds dumped loans, repeats itself, says our columnist Thomas Majewski

Private credit managers are partially insulated from daily market moves — for them it’s the dough, not the Dow
If asked about credit investing, Yogi Berra might have said take the fork in the road leading to private credit, says our columnist Randy Schwimmer

Points up front: “I always think of myself as Bruce Lee when I’m investing in CLO equity”
An analytical mind, a strong network of industry contacts and an eye for value are vital for a competent CLO equity investor. But don’t forget the one-inch punch

Without a single dollar being raised, future loan supply dwarfs current demand by as much as 10 to one
There’s plenty to be spent on mid market loans, but it’s still not enough to cover the $1 trillion of financing likely to be required, says our columnist Randy Schwimmer