Banks back with a bang as ‘floodgates open’ in US CLOs

By Will Caiger-Smith
03 Apr 2014

The return of large bank investors like JP Morgan and Wells Fargo to the market for triple-A CLO paper this week has boosted demand, helping managers increase their deal sizes as optimism about potential grandfathering of existing CLO deals under the Volcker rule took hold. At the same time, strong equity demand is helping supercharge the market.

Just under $25bn of supply has now hit the market this year according to GlobalCapital data. That blows away early predictions made when participants were contemplating potential forced sales of bank’s existing CLO holdings because of restrictions in the Volcker rule.

But large CLO investors including JP Morgan ...

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