CLOs look attractive after corporate rally - but not all tranches: Barclays
Rallying corporate cash credit spreads over the past two weeks have widened the basis with CLOs and made these products look attractive again, according to Barclays strategists

Hidden loan tail risks and mounting single B exposure could pose problem for CLOs: Barclays
A solid rally for leveraged loans this week - against returning weakness in bonds - has put focus back on the market, which seemingly has little tail risk priced in. But short term support factors and a dwindling triple C bucket mask the quality skew, warn Barclays strategists in a note today - which could spell downgrades for single-B minus rated loans

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

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 

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

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

CLO demand to drive loan outperformance over bonds: BNP Paribas
The buying power of CLOs and funds could mean leveraged loans rally further and outpace high yield bonds, says BNP Paribas' credit research team

ESG drive poses little threat to CLO returns or flexibility, says Moody's
Environmental, social and governance investment criteria are not impairing CLOs either in flexibility or performance, Moody's Investors Service has found in a new report

CLO investors still hungry for triple As and double Bs, says JP Morgan
Most CLO investors are looking to add risk through deals in the months ahead, with very few inclined to reduce exposure, a JP Morgan survey has found - despite the historic flood of issuance in the first quarter of this year

CLO equity ‘top trade’ could reach mid-teens returns, says JP Morgan
CLOs’ strong start to the year, in which the asset class has asset class has made gains against a sell off in government and corporate bonds, has put equity tranches on course for double digit returns in 2021, according to JP Morgan strategists

UN PRI's upcoming report on ESG in CLOs finds bar is very low
In a preview of the upcoming report, Carmen Nuzzo, head of fixed income at UN Principles for Responsible Investment, reveals to Creditflux key highlights from its ESG in securitisation report

ESG growth in CLOs has momentum in 2021, say JPM strategists
ESG investing in securitised products such as CLOs have 'momentum for growth in 2021' despite very slow volume growth and lack of progress in standardised scoring over the past year, say JP Morgan strategists in a research note

Buy CLO equity to capitalise on reflation, says JP Morgan
CLO equity stands out in a tightly priced market as offering up to double digit yields, say JP Morgan structured credit strategists, who posit it as their top trade

Go for short-duration and high-end CLO paper, says JP Morgan
This year is shaping up to be nearly as weak for CLO new issuance as 2008, according to JP Morgan strategists, who recommend investors seek value in short duration double/triple A paper or in higher-tier triple/double B

CLO and distressed fund recovery disparity could grow, say Barclays
CLO investors should apply a haircut to the $55-60 loan recovery range to better estimate recoveries in CLO models, as the disparity between how distressed debt funds and CLOs extract value in a loan restructuring is expected to widen

Leveraged loan spreads to widen to March levels, warn UBS strategists
US leveraged loan spreads could widen back to March levels of 825 basis points as default risk increases, according to strategists at UBS.

US CLOs did not lose par in March, finds JP Morgan
A research paper from JP Morgan has estimated there was no US CLO par burn in March, although loss of par for the first quarter was 11%

CLO managers favour tech, cable and healthcare as loan downgrade fears dominate, finds JP Morgan
Picking safe sectors to buy in the coronavirus crisis is a tough call, but CLO managers variously favour technology, cable/satellite and healthcare, according to a JP Morgan survey. There is much more consensus on dumping autos, energy, gaming/lodging/leisure and retail

Fed cut triggers Libor floors on third of US loans
Roughly a third of US loans effectively became fixed rate investments this week as Libor edged below 1% for the first time since January 2017

Ratio of CLO managers adding risk falls to lowest level since 2009, JP Morgan finds
The proportion of CLO managers looking to add risk has fallen to its lowest level since 2009, according to a market survey carried out by JP Morgan’s research desk

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

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

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