Latest news
Latest news
State of New Hampshire's innovative bond gets Ba2 rating
Falling leveraged loan prices promise tantalising returns, but the risk of defaults is rising
Some managers are choosing loans conservatively to avoid losses, but they will struggle to improve returns
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The pace of loan refinancing and repricing eased in the first quarter of 2018, according to a quarterly update from Fitch Ratings. Some investors expect this trend to continue as companies look to dodge rising rates by refinancing loans in the fixed rate bond market.
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Highly valued companies that are yet to make any money are enjoying a strong reception in the US high yield market. WeWork and Netflix were the latest to sell bonds this week, despite questions over WeWork’s accounting, which turned a $933m loss into $233m of earnings. David Bell reports. -
The trading ability of European and US CLO managers is being affected by the deterioration of a key collateral quality metric designed to protect debt investors, according to a report by Moody’s this week.
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BBVA secured a guarantee on Monday for a €2bn loan portfolio from the EIB Group, comprising the European Investment Bank and European Investment Fund. The aim is to encourage BBVA to boost lending to Spanish small and medium-sized enterprises.
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Nomura is mulling the launch of a fully fledged European CLO business, complementing its existing EMEA leveraged loan franchise and a track record of deals executed in the US. The bank already has some warehouse lines outstanding, but is looking to build up its operations.
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Post Advisory Group, which set up a new CLO business in September last year, closed a debut deal on Tuesday as spreads leak wider in the primary market on the back of heavy supply.
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The US high yield market has snapped back after softening in February and March, with recent deals issued at steep discounts bouncing back in the secondary market as retail funds flocking back to the sector chase scarce paper.
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A recent spike in three month Libor has prompted US loan borrowers to switch to the cheaper one month Libor rate, causing a mismatch between CLO assets and liabilities that is putting a new strain on the arbitrage in the structures.
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The bullish sentiment around the European CLO market was on full display this week at the IMN Investors’ Conference on European CLOs and Leveraged Loans in London, with expectations of higher issuance, more investors and US managers seeking more opportunities to issue on the continent.
