Latest CLO/CDO news
Morgan Stanley analysts described the potential rollback of risk retention rules for US CLO managers was a “modest positive” for the market on Tuesday, adding $10bn to their 2018 issuance forecast, but they warned that credit quality could suffer in new deals because of the scarcity of leveraged loans.
Premier Oil’s restructuring last year was a test for the risk transfer market, as the different synthetic securitizations exposed to the troubled firm reacted very differently. The European Banking Authority wants to see a tougher approach and more consistency in the market, which could hurt some firms’ ability to transfer risk.
First time issuers are dominating activity in the growing market for commercial real estate CLOs, with Bridge Debt Strategies the latest debut real estate investment trust to tap the market.
Shares in US CLO manager Marble Point’s listed loan fund were admitted to the London Stock Exchange on Tuesday, after the firm successfully closed a $42.5m initial public offering on Friday.
US high yield bonds have been jittery in recent days but the loan market has largely held firm, with few opportunities for CLO managers to buy assets on the cheap. The riskiest pieces of CLO debt have shown some vulnerability to market pressures, however.
A ruling last week by a US court exempting CLO managers from risk retention rules should boost supply of US CLOs, though demand may suffer, as regulated European investors will no longer be able to buy into US deals, said bankers. Likewise, European CLO spreads may tighten as the supply of compliant paper dwindles.
GlobalCapital revealed the winners of its Syndicated Loan and Leveraged Finance Awards 2017 at its 15th Annual Loans Dinner on Wednesday. Banks and borrowers from all over the EMEA region attended the dinner at the new venue of Gibson’s Hall in Bishopsgate, London.
In a big vote of confidence in the CLO product, the District of Columbia Court of Appeals ruled on Friday that CLO managers should be exempt from risk retention requirements, vindicating the arguments put forward by the Loan Syndications and Trading Association against federal regulatory agencies.
Equity market turmoil has brought the US high yield market down from exuberant levels, but some investors have welcomed the move and are confident that primary market activity will soon pick up, despite one borrower scrapping a deal on Tuesday.
Argentic Silverpeak has announced a debut US CLO backed by commercial real estate loans, following the pricing of a $932m TPG Real Estate Finance deal on Monday, as tight pricing encourages borrowers to turn to the capital markets to finance short dated real estate lending.
Go to GlobalCapital's Securitization data pages for our dealflow database, plus details of priced European and US CLOs and structured finance bookrunner league tables.
Latest securitization people & markets news
- European securitization veterans launch research boutique
- CLO credit quality could weaken without risk retention, says Morgan Stanley
- MUFG promotes credit sales head
- Goldman banker joins Swiss bank to launch structured finance biz
- EBA pushes for tougher hedging after Premier Oil splits risk transfer market
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Latest news by market and league table performance
|Rank||Lead Manager/Arranger||Total Volume $m||No. of Deals||Share % by Volume|
|1||Bank of America Merrill Lynch (BAML)||7,026||25||11.95|
Bookrunners of Global Structured Finance
|Rank||Lead Manager||Amount $m||No of issues||Share %|
|2||Bank of America Merrill Lynch||10,472.90||27||9.88%|
|3||Wells Fargo Securities||9,632.91||31||9.09%|