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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A wider market rally boosted by positive vaccine news from Pfizer, Moderna and the University of Oxford has begun feeding into the European CLO market, tightening secondary spreads while primary markets remain more sluggish. -
A flurry of primary CLO deals in the BSL and middle-market opened up post-election supply in the US last week, with Ares Management achieving the tightest spread on triple-A rated paper since the pandemic and Pimco returning as issuer after a 13 year absence.
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Penta CLO 2 has become the first CLO to switch its coupon payment from three month Euribor to six month Euribor, according to Fitch Ratings on Monday, following the flood of underlying loan borrowers choosing to push payments onto the longer timeline.
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The Covid-19 pandemic has reshuffled the CLO investor base, with big bank buyers cutting their exposures, and insurers and mutuals gaining shares. Smaller pension funds and high net worth individuals have also entered the sector, tempted by the surprisingly strong performance of the asset class through the crisis period.
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At least two new middle-market CLO deals and two resets are being readied to open up a primary market that has been quiet since the end of October.
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Mount Logan Capital has acquired management rights to two middle-market CLO contracts from Garrison Investment Management. The asset manager disclosed the acquisition in an announcement and said that it paid $3m to take over the two CLOs together with “certain side letter agreements”.
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Indiana Public Retirement System has committed $80m to Oak Hill Advisors Structured Products Fund II to invest across CLO debt and equity tranches in the US and Europe in the secondary market, according to a board meeting document.
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The first quarter of 2021 is set to be a cautious opening for the European CLO market, with many banks still unwilling to open new warehouses, given the volatility of this year. Sources anticipate just five to six deals landing in the first quarter.
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Jefferies and Kennedy Lewis Investment Management will invest $160m with asset manager TCW to boost the firm's CLO issuance program over the next two years.
