Farewell Mike
After two decades, Mike Peterson, the founder and long-time editor of Creditflux, is moving on.

Points up front: There are lies, damn lies and awards pitches
We’re hearing empty boasts, trash talking of their rivals and no shortage of promises that will absolutely be delivered.

Points up front: ‘We’re slow and not smart’
Politicians on the campaign trail would do well to take a leaf out of Brian Starr’s book.

Past returns: Bond king’s exit ends CLO refis
Five years ago in Creditflux, we reported on a market absorbing the consequences of ‘bond king’ Bill Gross leaving Pimco, the firm he co-founded.

Points up front: Credit professionals to sleep rough for charity
Head of structured credit at Napier Park Global Capital, Serhan Secmen, will be spending 21 November sleeping out. He’s not being evicted – rather he’s volunteering to raise money in support of homeless children.

Regrettably, a small number of CLO debt investors insist on ‘hardcoded’ Sofr replacement provisions
Sofr looks like the most likely candidate to replace Libor, but it is still risky to write it into CLO documentation

It may seem a bit rich for Welshcake to tell staid CLO investors they need to be more sensible
Bespokes are the next big thing — and you’d be wise to get involved

Typical CLO structures can’t take advantage of dislocation in the high yield bond market – yet
High yield bond buckets in CLO 1.0s allowed managers to build par — it is time CLO 2.0s had the same opportunity

They said it: "Oh no, it’s that f***ing ESG thing again"
A conference attendee is heard voicing his displeasure that lines between CLOs and ethical investing are blurring

Points up front: Best to price your deals between 12 and 6am
The latest addition to JP Morgan’s index suite — which aims to quantify the impact of US president Donald Trump’s tweets on the financial markets — has been so popular it has landed its own Wikipedia entry

Points up front: Performance will decide if these are ‘enhanced’ CLOs
Triple C-heavy CLOs have been touted in some quarters as a step forward for the industry with Ellington, HPS and Z Capital producing CLO structured along these lines.

If you can stomach volatility, CLO equity is very attractive

For enhanced CLOs to outperform, investors need the credit cycle to turn — and quickly
If the current credit cycle doesn’t end within two years, triple C-heavy CLOs will not see a return on their high financing costs

Past returns: Unfinished business in CLOs
Five years ago in Creditflux we reported that DA Capital was looking for a way back into CLO management. The firm had sold its four US CLOs in 2011 to Citi Alternative Investments (now known as Napier Park Global Capital), but a rally had convinced the firm it was time to issue CLOs again. 

They said it: "CLO Euribor floors are in the money"
In a blog, TwentyFour Asset Management’s Aza Teeuwen says that Euribor floors are worth over 50 basis points of extra spread, but this is not being priced in.

Enhanced CLOs are no more enhancing than run-of-the-mill distressed funds
Triple C-heavy CLOs that try to time the market may be paying for options they never use

They said it: "They are finally picking up the phone and making use of their rolodexes"
Bankers have been forced to reconnect with the broader triple A CLO buyer base now that Norinchukin Bank has stepped back, says a US CLO equity investor.

Considering the variables over the life of a CLO, a drop in Libor is a relatively modest risk
Changes in Libor do not have a major impact on CLO equity cash flows or equity yields

The IRR of CLO equity is driven by far more than just initial spreads
No one ever says the CLO equity arb looks great. But even in particularly challenging periods there are ways for equity investors to generate strong returns

CLOs are pricing with an acronym premium rather than an illiquidity premium

John Popp of Credit Suisse Asset Management takes our credit quiz

They said it: "I saw a CLO OM which ran 484 pages"
At Creditflux’s Credit Dimensions event, JP Morgan’s Zaheen Mir argues that CSOs are simpler to understand than CLOs

Past returns: Blocking flexibility of CLO managers
Ten years ago, we reported in Creditflux that JP Morgan had mounted a campaign to stop CLOs changing their trading guidelines. The bank’s treasury desk was and is among the biggest buyers of senior CLO tranches and it convinced other senior investors to block a change that would give CLO managers greater flexibility.

Points up front: Funky fund manager is music to our ears

Points up front: Producing the perfect CLO
Mitsubishi UFJ Financial Group’s head of CLO issuance Asif Khan directed a thought-provoking question to Pimco’s Loren Sageser at Creditflux West last month.