Loan supply easing sparks CLO splurge
One of the biggest challenges for CLO managers is easing up as the volume of new leveraged loans starts to increase, putting the brakes on a long rally in loan prices and sparking a flurry of deals.
Loan spreads started to widen in July as supply increased, according to a report from Wells Fargo analysts on Wednesday.
Loan prices dropped by about 150bp during 2016 to the 350bp area but have now ticked up to 387bp, which could slightly ease the pressure on CLO arbitrage.
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