European private credit CLOs have settled on a favoured structure. Barings recently reset the first deal in the asset class, which it priced in 2024.
Barings took a cautious approach back then — liabilities in euros only and no reinvestment. The market has come on a great deal since, and reinvesting deals with sterling tranches have become standard.
The manager used the reset to update the deal to the structure of the day and still managed to nudge spreads tighter, showing how investors have become comfortable with the way the structure has developed.
Barings hasn’t been the only one interrupting the summer holidays to reset trades. In the BSL market, there’s been no let-up. According to GlobalCapital’s Asset Backed Monitor, 11 CLOs have been priced in August so far, of which eight are resets.
It’s easier to get a reset away in the summer than to ramp up a new issue, because the primary leveraged loan market mostly takes time off during the season.
The public ABS market has also been quiet, other than a recent preplaced CMBS. So Tom Hall used the time to examine the rise of collateralised fund obligations.
Our US senior securitization reporter, Chad Van Estrop, also makes a guest appearance this episode to talk about the stricken US ABS issuer Extenet.
