CLO market suffers new issue fatigue in mezz

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By Tom Brown
10 Mar 2021

Traders say the CLO market is suffering from new issuance fatigue, while worries over inflation and rising Treasury yields have also begun feeding into the European secondary market. But any softness is unlikely to last long, given a strong longer term technical backdrop.

The spreads have widened lower down the capital stack while remaining steady on triple-A paper. In the last week, double-A spreads widened by around 5bp, while single-A widened by 15bp, triple-B went out by 30bp, double-B by 30bp and single-B spreads by 25bp.

Strong CLO formation has also left ...

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