European CLOs well-placed to counter volatility: Fitch
High inflation could hamper borrowers, but European CLOs are in decent shape with most loan issuers having refinanced last year, according to a report by Fitch Ratings. Other parts of structured credit are not as well insulated against risks. 

CLO equity returns to flatten while Sofr transition gains fresh impetus: BofA
CLO equity returns are forecasted to be relatively low in the first half of the year, and as this plays out there could be greater incentive for equity investors to push for a switch in CLO benchmark to Sofr.

Volatility has teed up decompression trades: Barclays
Recent credit market turbulence has brought relative value trading opportunities between cash bonds and CDS, credit and equity as well as between investment grade and high yield, particularly in Europe

CLO mezz investors are homing in on documentation: Morgan Stanley
European CLO mezzanine investors paid close attention to documentation over the past 12 months, with junior overcollateralisation test criteria, weighted average life extesions and approval for collateral quality key areas of focus, say Morgan Stanley strategists

CLO equity could get hurt by mismatch in credit spread adjustments: Barclays
The possibility that borrowers and sponsors start to use their clout to scrap credit spread adjustments from leveraged loans poses a risk for new CLO equity, while legacy deals also face transition challenges

Impact of Russia-Ukraine war on Euro CLOs will be indirect, finds BofA
European companies largely do not have much direct exposure to Russia or Ukraine, but pricing and inflationary pressures may impact companies

CLO investor cash balances at lowest levels since 2009: JP Morgan research
A survey conducted by JP Morgan has suggested that CLO investors' cash balances are at their lowest levels since 2009 - but most managers want to add risk in the coming months 

Credit awash with volatility in first week but investors load up
It has been a volatile opening week to the year for credit, but one in which investors have allocated bullishly to credit funds

Euro bonds set to outperform US despite big fund outflows: BofA
The November credit crash has left Euro investment grade bonds wider than those in the US, a rare occurrence that sets the scene for a January rally, say Bank of America credit strategists

CLO lower cap stack will outperform with $175bn new issuance in 2022: JP Morgan
Equity and lower rated tranche investors will do best as $175 billion of global new CLO issuance arrives in 2022, predict JP Morgan strategists in their annual outlook, taking market size to $1.2 trillion

Loans will be winners in bearish year for credit: BNP Paribas
Floating rate loans are best positioned for a year of widening credit spreads, but high yield bonds will outperform investment grade and EM credit is set for losses, says BNP Paribas in its 2022 outlook

Slow and sustainable trades will win race in '22: BofA
A year on from the US presidential election and unveiling of covid-19 vaccines, the credit compression looks challenged. But 'laggards' and sectors with strong capex growth still hold promise

Credit bull run falters as central bank glow abates
Thoughts that the credit market had taken a positive directional shift are turning, after Tuesday’s session has brought a sizeable retracement wider, but credit strategists predict an overall firming of tone into the end of the year off the back of dovish central bank meetings

CB bond purchase 'greening' is game changer for credit: BofA
Confirmation by the Bank of England that its corporate bond purchase scheme will be ‘greened’ is a game changing moment for credit markets, say Bank of America strategists

CLO resets drive equity returns to highest in five years: JP Morgan
Equity investors in US CLOs are earning, on average, the biggest returns of the past five years, finds JP Morgan – with deals reset this year having done most to raise the numbers

Europe dominates ESG issuance, but US is racing to catch up: BofA
The stark gap between European and other regions in issuing ESG bonds has been thrown into the spotlight by last week’s COP26 summit. Nevertheless, encouraging data suggests the US is accelerating fast in its drive to bridge the gulf, finds Bank of America

It's a-live! AI platform launch puts US ratings in spotlight
RoboR8, a fintech platform that aims to democratise credit ratings through artificial intelligence, has launched and hopes to rate 50,000 companies by the end of December, before building to several million in 2022.

Sofr transition timing puts CLO debt and equity at odds, says BNP Paribas
CLO investors look to have tough conversations ahead on the structure implications of the transition from Libor to Sofr, with BNP Paribas strategists noting CLO debt will benefit from an early move while equity tranches would do better to wait

There's still time to pick up pennies in credit before steamroller arrives: BNP Paribas
Declining dealer inventories, rising fund cash balances, and a greater prevalence of hedging have added up to produce a credit market that is positioned too short, according to BNP Paribas strategists

Long duration high yield will overcome short-term rates carnage, says BofA
Bonds with inflation-protected real yield, longer duration, and especially those in the utilities sector are among the most compelling trades amid a phase of ‘policy paranoia’, according to Bank of America credit strategists

BofA revises global CLO new issuance forecasts upwards but refi/reset forecasts diverge
CLO strategists at Bank of America have boosted forecasts for European and US CLO 2021 new issuance volume for the second time this year. But projections for refi/reset volumes across the continent have been tweaked in two separate directions

Credit shrugs off ECB tapering signal, but strategists warn of IG vulnerability
Credit markets are ending the week on a firm footing after taking in their stride the European Central Bank’s message that it expects to limit asset purchases in the coming quarter. But some parts of the market look more vulnerable than others, say strategists

Rising star portfolio has room to run, says JP Morgan
The theme of 'rising stars' still has room to run and investors should consider a basket of candidates to benefit in the coming months, according to JP Morgan credit strategists

High yield compression has one last push after real yields turn negative, says BofA
With real yields for European high yield bonds having turned negative, Bank of America credit strategists see "one last hurrah" for spread compression trades

Lingering covid vies with inflation as top credit threat, finds BofA
Covid-19 lingering is catching up with inflation as credit investors' number one worry, Bank of America's August survey has found. The picture for central bank purchases is bullish, but strategists see industrial and bank senior bonds as shorts for contrarians over the summer