Latest news
Latest news
Changing issuance patterns, tight mezzanine spreads and investor demand deliver bumper crop of deals
Deal follows Macquarie's acquisition of Spire, which issued previous Aurium CLOs
Pim van Schie, a portfolio manager at Neuberger, discusses rising investor appetite for CLO mezzanine tranches
More articles
More articles
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Antares Capital has priced a jumbo reset, giving a new lease of life to its $2.1bn middle-market CLO originally issued in 2017. -
Spread tightening on double-Bs tranches has created a domino effect, increasing the investor demand for the riskier tranches rated single-B.
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The synthetic risk transfer market helped some of Europe’s biggest banks dodge loan losses last year, with Barclays saving more than £300m and Deutsche at least €150m. But the backdrop last year led to investors taking a tougher line on writing new credit protection, steering clear of pools with limited disclosure and hoping to dodge the most damaged sectors.
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The complexity of CLO documentation, and the need for easy access to deal info is encouraging tech providers to step into the breach and offer solutions to simplify the time-consuming processes of CLO investing. As managers adapt their deals to handle the fallout of the pandemic, good tools to handle documentary complexity have become all the more important.
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Investors in search of extra yield are pushing CLO managers to once again add single-B tranches to deal structures, now that the volatile market conditions of 2020 have subsided.
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PGIM has pushed the market to a new tight by resetting a deal with senior notes at 104bp over three month Libor.
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CLO liability spreads are tightening faster than leveraged loans can reprice, boosting the arbitrage available for managers hitting this window and encouraging others to rush into the market where possible.
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Tikehau Capital has appointed Christoph Zens from Commerzbank as head of the firm’s CLO business, replacing Debra Anderson who is set to retire in the second quarter of 2021.
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The US CLO market is gaining positive traction in the first quarter of the year, with strong demand from investors, and spreads continuing to tighten, despite the absence of the Japanese banks, traditional anchor buyers of the senior tranches.
