More than 45% of Euro CLOs to be out of RP by Q1 2024, Fitch says
More than 45% of Fitch-rated reinvesting European CLOs are anticipated to be out of their reinvestment period by the end of Q1 2024, up from around a third as of April, which could lead to rating pressure for mezzanine tranches in those deals

Euro CLO exposure to financial sector 'limited', say Fitch
European CLO exposure to the financial sector is 'limited' and CLO ratings will not be impacted by UBS's acquisition of Credit Suisse, according to new data from Fitch Ratings

Loan trading within European CLOs drops to 0.6%: BofA
European CLO manager trading activity declined sharply this year amid less leveraged loan primary supply and declining secondary liquidity, according to Bank of America research

Five issuers account for 22% of Euro CLO triple Cs: BofA
22% of triple C-rated debt in European CLOs originates from just five issuers, according to analysis from Bank of America research this morning

Largarde snowballs puncture complacent calm and shocks spreads wider
Credit markets are ending the week on a big push wider, after European Central Bank chief Christine Lagarde delivered the surprise that had been missing from other central bank messaging

Major fund withdrawals undermine credit momentum
Credit funds are extending their run of inflows into the end of the year, but investment grade momentum took a dent last week due to investors in one big fund pulling their money

European CLO equity outperforms single Bs amid high return dispersion: Bank of America
European CLO returns have been negative across the capital structure this year, a research paper from Bank of America has found. Losses have been softened however due to an increasing three-month Euribor rate, high carry relative to corporates and relatively stable equity returns.

Capex and real yields will split winners from losers in '23: BofA
Companies able to undertake capital expenditure will be the winners in 2023, while those historically most sensitive to rising real yields should inspire caution, say Bank of America strategists

Rebuke for optimism as US jobs send market bulls running for cover
Investors’ determination to maintain an optimistic outlook on US Federal Reserve policy hit a point of reckoning on Friday, with hot US jobs numbers adding weight to committee members’ message that there is still a lot more work for them to do

Euro CLOs have better 2023 entry point than US in $140 billion issuance year: Barclays
CLO performance and issuance may have to wait until the second half of next year for improvement, say Barclays credit strategists in a 2023 outlook piece. But Europe could fare better than the US given starting levels in a year the market faces some challenging regulatory hurdles

Euro CLO new issuance could reach €22 billion in 2023, says BofA
European CLO new issuance will reach €22 billion in 2023, strategists at Bank of America expect, while refinancing / reset volume should reach €3 billion under a ‘base case’ scenario

Powell outlook brings risk buyers out in droves, but reality check looks soon to follow
Comments by US Federal Reserve chairman Jerome Powell on Wednesday on the pace of future rate hikes have prompted a sharp rally across global financial markets, including credit. But dissenting voices have already begun to point out the enthusiasm is likely overdone

Credit Suisse tests investor nerves as market preps for Fed-focused week
Credit Suisse, which has been subjected to another week of intense scrutiny, is heading into the weekend with its credit spreads extending wider, after warning on losses and undertaking a capital hike

Swiss bank looks to plug holes but investors are hun-gruyere for risk
Credit Suisse is a rare, worrisome cloud in an otherwise brightening sky this week, as Europe extends its tightening trend in credit with the US standing at ease for the Thanksgiving holiday

Outsized corporate rally puts financials RV in focus
The week is ending with resumption of credit’s recent rally after a brief pause, and Europe once again taking the lead over the US

Things are looking up... for curve steepener trades: Barclays
Investment grade credit index curves look too flat, say Barclays strategists – and that makes it a compelling time to consider steepener trades in Europe and the US

European outperformance creates index options trading mismatch: Barclays
The recent outperformance of European credit over US has shifted the value of iTraxx index options, but CDX index volatility premiums stand out for having hit a new low

Financials offer relative value opportunities after synthetic credit overshoot: BNP Paribas
A technical squeeze, driven by investor risk appetite but also short covering, has taken some parts of the synthetic credit to a point where cash bonds look to offer better relative value

Credit euphoria follows CPI, but analysts warn of comedown
Softer than expected US inflation numbers have ignited a spectacular rally in financial markets. But strategists and economists warn against the exuberance, arguing more pain is likely on the way

Soft mood music abruptly dashed as Fed and BoE rile markets
The credit market’s strong run of improvement has come to an end this week, with the US Federal Reserve and Bank of England delivering a reality check to hopes of a more dovish path forward on interest rates

Credit faces blind spot as borrowers enter higher default cycle: BNP Paribas
With short term rates outstripping nominal GDP growth, the credit cycle is entering its next and final stage – one in which corporate defaults will pick up but high quality borrowers should outperform

Private equity firms are becoming CLO converts: TwentyFour
Private equity firms have increasingly bought CLO and other securitised debt tranches in recent weeks instead of their usual preference for physical assets - a trade TwentyFour believes "makes perfect sense"

Credit pivots sharply as US returns to growth and ECB confirms record hiking cycle
After a wider start, credit markets reversed course Thursday having digested a strong US GDP reading and the European Central Bank lifting its base rate by 75bp – a move that confirms this as the region’s most aggressive ever hiking cycle

Sofr away from me – basis puts new CLO triple As in dire straits
A relative value gap has opened between secondary and primary market CLO triple A tranches, with the former looking attractive as volatility heightens and the basis grows between Libor and Sofr. This presents an additional problem for managers hoping to do new business

UK credit spreads rally for Rishi
UK credit spreads have rallied sharply on Monday with the victory of Rishi Sunak in the contest to become the country’s third prime minister of the year