Gridlock in CLOs as managers feel loan squeeze

Euro in vice resized
By David Bell, Max Bower
19 Jan 2017

Tight conditions in the European leveraged loan market are proving a boon for borrowers such as private equity houses, but CLO managers, which form a large proportion of the lending base to that market, are starting to feel the pain. CLO equity investors at the bottom of the chain will determine how far the screws can be turned, write David Bell and Max Bower.

After an impressive 2016 which saw the largest volume of CLOs issued since the financial crisis, the primary market for European CLOs has ground to a standstill. Managers are struggling more than ever to source new collateral to ramp new deals, while aggressive loan repricings are squeezing the ...

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