Latest CLO/CDO news
Demand for US CLO triple-A paper is at its peak, with sources saying that competition for the bonds is squeezing out the Japanese buyer base that has long been a driver of the market.
Despite many UK-based CLO managers switching to the manager originator model for European risk retention in the immediate aftermath of the Brexit vote, many are returning to the sponsor route, with investors comfortable with either approach.
With primary European CLO spreads hitting some of their tightest levels since the financial crisis, better value could be found in more seasoned deals coming up for refinancing, said TwentyFour Asset Management on Monday.
Deutsche Bank is telling investors that it may be time to place bets against the CMBS market, as mounting problems in the retail sector threaten the health of some post-crisis bonds heavily exposed to lower quality retail properties.
Third party CLO equity investors could struggle to compete in a market in which managers have highly capitalised retention vehicles they can utilise to invest in both their own and other managers' equity, said industry sources this week.
CLO managers in the US and Europe are struggling to source loans, often pricing new deals with levels of collateral that are well below normal and thereby increasing uncertainty in the asset class. But views in each market diverge on the implications of the trend, as US CLO investors continue to show insatiable appetite, while their European counterparts cool their heels in the hope that spreads come off their historical lows. David Bell and Sam Kerr report.
After an impressive 2016, the best year for European CLO formation since the financial crisis, the market is taking a breather, as managers struggle to source loan collateral and investor appetite for the debt at tight spreads cools off.
Barclays has announced several senior appointments in its credit trading business, including the rehire of Shrut Kalra from Goldman Sachs to co-head European high grade on the derivatives side.
Third party CLO equity investors are a driving force behind the wave of CLO refinancings at the expense of new issuance, as pricey leveraged loans make returns on new deal equity less attractive.
A flurry of US CLOs were priced at the end of last week, jump starting the primary market after a long period of deal refinancings and resets.
Go to GlobalCapital's Securitization data pages for our dealflow database, plus details of priced European and US CLOs and structured finance bookrunner league tables.
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|Rank||Lead Manager/Arranger||Share % by Volume|
Bookrunners of Global Structured Finance
|Rank||Lead Manager||Amount $m||No of issues||Share %|
|1||Bank of America Merrill Lynch||5,438.32||17||10.24%|
|3||Wells Fargo Securities||5,182.26||18||9.76%|