CLO 2020 outlook: lower volumes predicted, but it’s not all bad news
US CLO issuance is expected to drop by roughly 20% next year, according to bank research desks. This comes after a solid 2019 in which $101 billion of new US CLOs have priced through 92 managers, as Creditflux goes to press

Investors increasingly see ESG as fiduciary duty, State Street survey reveals
North American investors are most likely to view ESG as a fiduciary duty, while European investors are driven by regulation, performance and reputational risk, according to results from a survey conducted by State Street Global Advisors

Central banks may consider ESG-compliant CLO paper, says Moody's
Central banks in Italy, the Netherlands, and France have begun integrating ESG into their investment process, a process which could reduce collateral refinancing risk of ESG compliant securitisations including CLOs, according to Moody’s

CLO supply set for double-digit drop in 2020, says JP Morgan
US CLO supply in 2020 will be as much as 20% down on 2019, while European issuance will fall 13% year-on-year, predict JP Morgan strategists in a research note. Even so, new CLOs should still outpace existing deal paydowns, as well as high yield primary market net new issuance

Diverging views emerge over performance of ESG investing, RBC survey reveals
Investors which incorporate ESG principles are convinced it adds value, but those who do not are more uncertain, according to a survey by RBC Global Asset Management 

Boeing/Airbus dogfight widens spreads as WTO ruling exposes Europe's trade weaknesses
The World Trade Organisation’s go-ahead for the US to impose $7.5 billion of tariffs on imports from the EU has sent credit spreads sharply wider. And, according to latest credit research from Bank of America Merrill Lynch, it exposes Europe’s “Achilles heel”

Political risk puts December in focus as CDS investors play index volatility
Selling implied volatility has been prominent among CDS investors since last month’s iTraxx and CDX index rolls, says BNP Paribas in a research piece, with December a popular point of focus for trades

18% of CLO managers priced their first deals post-January 2018, says Maples
Launching a new CLO management platform is ‘extremely difficult’ although the rewards appear to be worth the risks, according to new research from Maples Group

Go long CLO triple-A and pick cash bonds over CDS, says JP Morgan
Going long European CLO triple A paper remains one of JP Morgan strategists’ favourite trades following the European Central Bank stimulus announcement last week, despite these tranches having rallied 14bp on average since the bank first backed them. They also predict cash credit to outperform CDS

Four sectors most favoured by bullish resumption of QE, say BAML strategists
Autos, healthcare, media and real estate bonds are likely to be the biggest initial beneficiaries if the European Central Bank reinvigorates its corporate sector purchase programme (CSPP) next week, say Bank of America Merrill Lynch credit strategists

Buy iTraxx Europe equity tranche risk but sell Crossover mezz, says JP Morgan
Investors should stick with ‘search for yield’ ideas in investment grade credit, say JP Morgan credit strategists, including selling iTraxx Europe 0-3% equity tranches delta hedged, going long the 10-year Europe index, and selling credit volatility through index options while buying equity market volatility

Index tranches and Sub Fin basket among top picks after ECB meeting, says JP Morgan
The European Central Bank’s statement that rate cuts will likely be paired with tiered deposit rates suggests a boost for the iTraxx Sub Financials index, as well as tier two and additional tier one bank bonds, says JP Morgan in latest credit research. The bank also advocates selling iTraxx Europe 0-3% tranches delta hedged

Another 2008 would leave IG CLOs without losses but default rates will climb, says BofE
CLOs will see greater losses in a downturn than they did in the last financial crisis, according to the Bank of England’s Financial Stability Report

Direct lending challenges in 2019: competition, lack of quality assets and high transaction multiples
Results from Proskauer Rose's survey show these are not putting off 75% of respondents, who are fundraising for a debt fund

Triple B fightback has begun, says BNP Paribas
Fallen angel risk – the possibility that a wave of triple B credits could be cut by rating agencies to sub-investment grade – should begin to decline, according to strategists at BNP Paribas

CLO equity a "top trade" for 2019, but beware ratings risk, says JP Morgan
CLO equity is one of the top trades of 2019, according to research analysts at JP Morgan in a research paper published on Friday, noting that the asset class offers ‘sticky capital in a volatile cycle'

Direct lenders pile into "turbocharged" market as fundraising skyrockets: report
Growth in the direct lending market in the 12 months to 31 December was “turbocharged,” growing robustly in the fourth quarter 2017 in particular due to a consistently growing Eurozone economy, according to Deloitte

Euro SME CLO market to remain at low issuance levels, DBRS predicts
A new report by credit rating agency DBRS says the European securitisation market has much to be positive about in 2018 – but warns that the SME CLO market is expected to remain at low issuance levels 

European direct lending up 34% in recent quarter: Deloitte report
Direct lending in Europe continues to boom, according to the latest Deloitte deal tracker, which found a 34% growth of direct lending deals in third quarter 2017 alone compared to third quarter 2016

Private debt performance shines in institutional investing study
A quarter of institutional investors say private debt outperformed their expectations over 12 months to 28 August 2017