They said it: Be careful what you do — last warning
In court filings, Highland Capital Management alleges that its founder and former chief executive James Dondero sent this ominous text message to its current CEO James Seery

Points up front: Brushing up on CLOs
It’s that time of year when CLO analysts forecast 2021 CLO volumes. It’s a thankless task, but for Serhan Secmen, head of CLOs at Napier Park Global Capital, losing a wager with a US CLO structurer on CLO volumes in 2015 meant he had to create a work of art on a triathlon theme

Points up front: I couldn’t, I’m stuffed
At Creditflux’s CLO Investor Summit, NEPC’s Kevin Bliss coined the term “equity stuffing” to describe commingled funds that CLO managers raise to invest in their CLO equity

The structured credit industry could promote its benefits more
Filippo Sampietro takes our credit quiz

I foresee various spooky spectacles hitting our screens - and your long portfolios
Welshcake is settling in for a horror movie marathon. But in the previews he sees monsters lurking behind tight credit spreads

The cost — a few basis points — is modest compared to the potency of bond buckets
If CLOs had bond buckets when Delta Air Lines issued debt, a manager could have bought the bond then rotated into the loan

Past returns: Fees on the line
In Creditflux five years ago, we reported that CLO equity investors were insisting on “management fee adjustment clauses” in the event that collateral managers did not consent to a refinancing

CLO collateral managers who are able to update their documents could gain warf advantage
Moody’s is reviewing its approach to warf. Changes could boost managers’ ability to trade

Questions will need answering about where a manager's fiduciary responsibility lies
A university lecturer gives Welshcake a shock with a CLO presentation that points to shady trading games

They should have followed Revlon's Double Twist mascara slogan of 2009: "It's worth a double take"
Blockchain might not eradicate all problems in credit, but it should reduce human error

The length of a CLO’s reinvestment period has no substantive effect on its resilience to defaults
Three-year reinvestment CLOs are the norm, but debt investors should be locking in historically wide spreads for longer

Points up front: From drafting CLO docs to writing crime thrillers
Nicola Bashforth, a popular figure in the CLO business, announced last month that she had left the industry to return to Lancashire in England and try her hand at writing novels

Points up front: How much do I owe you?
Payment systems in the credit industry had a bad August

The surge in index tranche trading has resulted in a deep, liquid and nuanced set of market dynamics
Welshcake emerges from his bunker to find CLOs still standing and the CSO market getting back to business

Don’t obsess over the state of your OC cushions
During Creditflux’s live CLO webinar last month, panellists agreed that fighting to keep an over-collateralisation test in compliance could do more harm than good in the long term

Past returns: Not quite hitting the ceiling
In Creditflux five years ago, we reported that Credit Suisse Asset Management had embedded a Libor cap in the sterling-denominated debt issued by Cadogan Square CLO VI...

They said it: "Imagine a garden party and all of a sudden a big wasp shows up"
On Creditflux’s US CLO webinar last month, Napier Park’s head of US CLO investments Serhan Secmen described the March sell-off as a garden party

Points up front: Introducing Downton Flux

During last month’s broadcast of the Creditflux Manager of the Year, we were inundated with messages of congratulations for the award winners via a live feed...

Around 20% of the US CLO market has traded this year — not bad for an asset class that is seen as illiquid
CLOs can trade cheaply and directly, which helps keep volumes steady even in a crisis

If you’re not finding black talent, you’re not trying hard enough
In the past few weeks, it has been easy to put up our billboards and tweet our condemnation of the treatment of black people. Now we need to change the way companies work

It takes just a few CLO collateral managers selling into the distressed community to start cracks forming
It is becoming increasingly clear that CLO collateral managers need to improve their collaboration efforts in distressed situations

Past returns: GoldenTree CLO trades over par
Five years ago we reported that the equity in a GoldenTree 1.0 CLO was in demand, despite the threat that its position could be marked down to zero

Points up front: I’m terribly sorry, I didn’t quite catch that…
Creditflux has been running a series of webinars on CLOs and private credit, and despite the risk of unreliable technology, these have been held with few wifi-related issues...

Some managers calculated their CLOs were passing OC tests, only to find them failing the next day
Corporate credit downgrade storms have been weathered before, but this one has come out of season