New CLO managers flock to Europe to prey on downgrades

Albacore
By Tom Brown
09 Jan 2020

The European CLO market is marking the new year by bracing itself for a series of corporate downgrades. Ellington, a US CLO manager, has been sounding out the European market about bringing an ‘enhanced CLO’ in the first half of the year, which would allow for up to 50% of the portfolio to be debt rated triple-C or below, a far cry from the standard 7.5%.

Enhanced CLOs have not yet made their way to European shores, meaning the Ellington deal would be a first for the market.

A CLO portfolio manager away from the situation said an enhanced CLO from a big-name manager such as Ellington would likely be well received by European ...

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