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

Light at end of tunnel as S&P puts two loan issuers on creditwatch positive
Panellists at IMN's CLO and leveraged loan webinar were optimistic about the future of their markets as S&P makes first positive rating action on leveraged loan issuers since the pandemic outbreak

LP round-up: mighty Oaks win $1 billion apiece from Calpers
Credit investors allocated over $3 billion to 18 credit managers this week across a wide range of strategies

Eagle Point wins $100 million from US pension and launches 'defensive' CLO fund
Eagle Point Capital Management has won a $100 million mandate for its CLO strategy and has separately launched a new fund - Eagle Point Defensive Income Fund

LP round up: Pimco gets the Disco started as distressed managers win allocations
Insitutional investors allocated just over $1 billion to credit funds last week, according to board documents seen by Creditflux, with special situation funds from Farallon, Pimco and SSG taking the bulk of these commitments

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

The CMBS talf proposal is simple and effective. A similar approach for CLOs would be welcomed
It’s great that government is trying to boost securitisations, but they’re missing the mark for CLOs

Eagle Point cuts dividend payments on listed CLO equity fund
Eagle Point Credit Company has slashed its divident payment by 60% to eight cents a share, down from 20 cents a share, following losses to net asset value in the first quarter as a result of the coronavirus pandemic

The opportunities to build par and spread within a CLO haven’t been this plentiful since 2009
Last year’s CLOs could become the benchmark for manager performance

Distressed exchanges offer pathways to recapture value that others are trying to take from CLOs
Volcker rule amendments could protect CLOs from losing out to distressed funds in a restructuring

Don’t be tempted by low debt costs — the key driver of performance in static CLOs is market timing

Not all old tier one CLO managers lived up to their premier billing

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

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

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

Eagle Point prices IPO for junior CLO debt fund
Eagle Point Credit Management yesterday announced the pricing of an IPO for its CLO junior debt fund named Eagle Point Income Company

Eagle Point looks to complete IPO for CLO debt fund
Eagle Point Credit Management is looking to complete an IPO for a fund which invests in double B-rated CLOs, according to documents filed with the SEC

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

Being fully invested can have a greater impact on IRRs than avoiding 2% defaults annually
The IRR differential can be as much as 3.3% for a fully invested CLO versus one that maintains a 5% cash balance

Continuous par build can provide a rainy-day fund for when downgrades to triple Cs pour in
If CLO managers are preparing for mass downgrades to triple C loans, then trading gains and thick OC cushions are the best defences

Japanese investors must confirm assets are appropriate... CLO managers can provide assurances
The stipulation that Japanese banks invest in appropriately formed assets is unlikely to hurt the CLO industry

The extra 250-350bp is excessive compensation for the incremental risks run by long-term CLO investors
Double B-rated CLOs price at a premium over corporate credit and yet default rates are much lower

Q4 2018, which had loan price volatility without defaults, was close to nirvana for CLO investors
The current vintage of CLOs could be the best ever if the volatility in Q4, when retail funds dumped loans, repeats itself, says our columnist Thomas Majewski

We are yet to find a mass-media article that devotes attention to the potential merits of CLOs
Far too many recent mass-media articles critical of the CLO market are heavy on the hyperbole and light on the facts, writes our columnist and Eagle Point founder Thomas Majewski