European CLO equity buyers face supply squeeze

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By David Bell
13 Mar 2017

CLO equity is the “belle of the European credit ball” because of the level of returns investors enjoyed in 2016, said JP Morgan analysts on Monday. But with large risk retention vehicles muscling in and loan repricing taking its toll, the landscape is set to get rougher.

After a “tumultuous” 2015 which saw European CLO equity suffer a 10.5% negative price return, it enjoyed an 8.8% price return in 2016, the JP Morgan analysts said on Monday.

Total returns of European CLO equity in 2016 were on average 32%, they said, based on a sample ...

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