Market sentiment shifts as investors turn bullish on loans and CLOs
CLO market sentiment has shifted decisively in recent weeks with investors expressing more optimism than earlier in the year

"The equity IRRs of enhanced CLOs are nearly all in the bottom decile of the market"

Credit funds at a glance (August 2022)
A round up of fundraising and people moves in credit
   

Eagle Point expands into structured products including SRTs with big hire
Eagle Point Credit Management has hired a head of ABS, MBS SRT and specialty finance, in a move which underlines the firm’s progression from a CLO equity investor to a broader credit asset manager.

"The CLO that started the wave of prints and sprints paid near 20bp more than the market average"
It is possible to hit a home run with a print and sprint CLO, but execution is difficult  

CSAM does the CLO awards double
Winning the Creditflux Manager of the Year award is a feat in itself. Winning it back-to-back in such different markets is an outstanding achievement — and CSAM can take great pride in it

Single Bs return to US CLOs as issuers avoid par sub sting
Single B tranches have returned to US CLO structures, but with a new purpose

Eagle Point hires for defensive income strategy team
Eagle Point Capital Management has hired an associate, responsible for assisting the defensive income strategy senior investment team

"The CLO market can resemble a primary school soccer game, with everyone crowded around the ball"
The ability to refinance or reset a CLO is valuable, but there are friction costs to consider  

"Having tighter CLO debt costs will not be enough for brand names to outperform more agile competitors"
The drop in loan and CLO prices today is unlike any previous downturn — but again it will pay to be agile

"The reset market is open, but it doesn’t always make sense to extend the life of a CLO"
Strong secondary loan prices are making CLO liquidations a compelling option  

"This is the CLO market’s time to shine and prove it deserves to be a mainstream asset class"
The CLO market shouldn’t fear inflation — in fact, 2022 could be a very good year indeed

"We again have to flag up information in CLO marketing pitches that can mislead investors"
Cash-on-cash returns, default records and leverage statistics don’t always give CLO investors the full picture  

CLO pricing holds up against omicron as liquid credit takes a hammering
Being illiquid sometimes has its advantages, with the CLO market the picture of serenity as CDS swings imply volatility is afoot

"CLO equity investors have long accepted basis risk… but an off-market adjustment does not work"
The 26bp adjustment is disrupting the transition away from Libor — but market forces will prevail

LP round up: no Stoptober as investors allocate $5 billion to credit
US institutional investors allocated $5 billion to credit funds in October, with Oak Hill and Pimco among the biggest mandates    

Eagle Point hits $300 million hard cap on BDC-lending fund
Eagle Point Credit Management says it has held a $300 million final close on its Defensive Income Fund, hitting its hard cap and exceeding its original $250 million target

CLO Census results: Citi and JP Morgan still top in US but Jefferies breaks through in Europe
Citi and JP Morgan are the clear favourites in US CLO arranging – the pair are locked in a close battle for supremacy over deal volumes and they have been voted joint-best at US CLO execution, according to the results of Creditflux’s CLO Census

Everyone’s ramping

CSAM regains best manager throne
Upstart CLO managers overtook more experienced rivals at last year’s Creditflux Manager Awards, but CSAM and other large firms, such as PGIM, emerged victorious in London this time around

"Purchasing IG CLO debt was a key driver of success for 1.0 CLOs"
Longer reinvestment periods, the ability to buy IG tranches and improved loan settlements would improve CLOs

"If you sat still on a large portfolio of 2019 and 2020 CLOs, it may have shrunk by more than 25%"

"In some ways, CLOs resemble a quirky, cottage industry more than a trillion-dollar market"
CLO volumes outstanding have passed $1 trillion, but index omission and private placements are holding us back

"Spacs… what better buyer than someone with a short fuse who needs to get their capital working"
Since the beginning of 2020, more than $191 billion has been raised in spac (special purpose acquisition company) IPOs. This money has such a short fuse — get a deal done in 24 months or management loses the IPO costs it covered — and there has been so much of it, that it has had an impact on the markets