As direct lenders seek efficient, scalable financing tools, private credit CLOs are growing fast
PCLOs have reached USD 135bn, or 13% of the overall CLO market

The market will not look kindly on managers that don’t reset their deals
In today’s CLO market, the choice is stark: reset or slowly perish

CLOs that refinanced in 2024 are set to take advantage of market turbulence
There are opportunities for CLOs to build par through discounted purchases

Long-term CLO investments require strong distributions, healthy equity NAVs, and an extended life

Large managers have many advantages. But they don’t hold all the cards

Private credit should be resilient in a slowdown – but investors have decisions to make

Despite superficial similarities, CLOs and SRTs don’t have much in common

The NAIC’s Super Bowl Sunday memo seems to suggest regulations may not change greatly

Tariffs, trade wars and inflationary pressures are unlikely to prevent CLOs doing well this year
No two years are the same — but 2025 is shaping up to be strong

International trading systems were broken before Trump started smashing them up
Whether he succeeds in using economic might to assert US authority in the world, Trump will be brandishing the weapon of tariffs in an already fragile international trading system.

We expect to see global banks as the leading buyers of CLO triple As in 2025
As the market finds steady footing in an elevated rate environment, a big shift is happening at banks: after a brief period of restraint, they’re getting back into the business of lending and underwriting.

Without active management, safe CLO portfolios will limit returns
The CLO market is witnessing a shift towards purportedly ‘safer’ portfolios in new issue CLOs. But market sentiment has led many CLO collateral managers to perhaps unduly minimise risk over prudently maximising returns.

In a declining rate environment, CLO debt can still deliver strong performance
We believe investors are still better off investing in CLO debt than in high yield bonds, despite a declining rate environment

Rate cuts won’t hurt CLO equity cashflows — and may even boost them
With rates poised to fall, some investors are worried about the impact of rate cuts on CLO equity cashflows. But in our view, the change in rates isn’t really a big deal on the way up or down for CLO equity.

Past returns; Points up front
Past returns - PIMCO back and growing; Points up front - Avoiding catching the CLO bug & The bells ring out for public listings

A trusted brand is no longer enough — CLO manager tiering is now based on a range of data
Investors now pay close attention to the characteristics of each CLO, rather than relying solely on the collateral manager’s overall reputation or size

Atlas SP joins new CLO arrangers vying for growth as sector booms
Apollo Global Management affiliate Atlas SP has joined the ranks of CLO arrangers, adding to the burgeoning number of new entrants eager to get into the lucrative business

A reset can position a CLO for the drawdowns that follow a bull market
Extending a CLO’s reinvestment period is usually the best option — but timing is important

Triple As could widen rapidly if CLO ETF managers see large outflows
CLO ETFs are likely to grow rapidly, bringing increased volatility to the CLO market

Managers need to be able to capitalise on favourable document language
Maximising CLO returns post-reinvestment requires document flexibility and manager expertise

The Last Tranche with Christine Ferris
In the latest edition of The Last Tranche podcast we talked to JP Morgan’s global head of CLO primary Christine Ferris about why she loves working with debut managers, despite the extra challenges they face coming to market.

We understand why the NAIC is open to a new framework
The NAIC is right to tread carefully as it looks to protect its members from ratings arbitrage

The markets are supporting high reset and refi volumes —but sometimes calls are a better option
Broadly syndicated loans and CLOs kicked off 2024 with a nice rally. As a result, we are seeing a resurgence of majority CLO equity holders exercising their rights to refinance, reset, or even call their CLOs. 

Points up front
Blame it on the Bad Bunny; End of an era

Past returns: Where are they now?
Our latest set of manager rankings by AUM (see CLO rankings: 2023 turns out OK) prompted us to look back to our first league table in 2010