GlobalCapital: This is Nomura’s first win in the CLO category — can you walk us through the evolution of your CLO platform in the last few years?
Quinn: When we restarted the origination business at Nomura seven years ago we saw that with Anton we had a market leading trading operation, we had a market leading research franchise and we had a market leading distribution business. The origination franchise that we’ve now built was the missing piece of the puzzle. Over the course of the last 12 to 24 months that business has really hit its stride. New issue opportunities and the refinancing business that has sprung up over the course of last year have allowed us to carve out a dominant or top-ranked position.
GlobalCapital: How important is collaboration between your trading, structuring and distribution teams in the CLO platform’s success?
Lokhov: We have a nimble, flexible business but we’re not trying to win mandates by leveraging our trading balance sheet. We rely on our relationships and ability to generate alpha in any environment. The market has been very volatile over the last five years, and a lot of different themes have been at play yet we always succeed.
Bita: I hired Anshu to spearhead the CLO structuring effort 4 years ago. His main focus remains putting together innovative CLO structures that work well for CLO managers and our debt/equity investors. Anshu is responsible for running deal mechanics exceptionally well, which in turn makes it easier for us to distribute to our clients. At Nomura, we all work closely together and despite not being a large team with unlimited resources, what we touch, we try to do really well.
GlobalCapital: Were there particular transactions or trends that showcased Nomura’s ability and creativity in the CLO space?
Bita: From an execution standpoint, several transactions stand out. One was BlackRock’s Magnetite 38, where at the time of deal announcement, AAA spreads in CLO Primary were stuck in the SOFR + 150bp area, best-case. Nomura was expected to end up somewhere in the low/mid 150s, given the sudden departure of Blackrock’s lead CLO PM right when we launched, but we actually broke the SOFR+150bps barrier and were first to price a large, 500mm deal in the 140s (S+148bps,) the tightest syndicated print at the time. We ended up doing that several times in 2024 with other deals.
Chouhan: On several post RP amortizing CLOs (AIMCO 18A, MDPK17) we made arbitrage work by optimizing the structure which enabled us to avoid the CLO liquidation route.