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

CLOs' risk to Japanese banks 'subdued' despite ratings and mark-to-market risk, says Bank of Japan
The risk to Japanese banks posed by their investments in CLOs is ‘subdued’, according to the Bank of Japan Financial System Report

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

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

Fourth quarter CLO equity volatility is taste of things to come, says BAML research
CLO equity performance in the fourth quarter of 2018 gave an example of how mark-to-market returns could erase carry returns for investors, Bank of America Merrill Lynch says in its latest research piece

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'

CLO issuance will temper as market remains in 'exploratory mode', notes BAML research
Following a bout of volatility in the loan market, CLO issuance will be tempered as debt and equity investors rediscover correct pricing levels, according to a new research paper published this week by Bank of America Merrill Lynch

CLO spread tightening more likely than widening in Q1, says Wells Fargo research
CLO spreads are more likely to move tighter than wider in quarter 1 2019, despite the widening trend accelerating through December, according to Wells Fargo analysts

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 

Citi finds that triple A investors should look at short-dated CLO resets over refis
Citi's credit research team has put together a report assessing how US CLO triple A tranches are pricing relative to their inherent refinancing risk.

Citi models likelihood of CLO refis over resets
Control CLO investors are often faced with a dilemma - should we refi or reset? New research has modelled which outcome is more likely

CLOs dodged recent loan defaults, according to Wells Fargo
CLO exposure to three recent US loan defaults has been minimal, according to Wells Fargo research

Heading tighter into uncertainty
Tightening loan spreads are making the job of a CLO manager harder in both the US and Europe. But credit volatility could be on the horizon