Latest news
Latest news
Lower pricing across CLO capital structure does little to improve equity arbitrage
Manager tightens triple-A pricing by 27bp and avoids refinancing some junior mezzanine notes
Spread on triple-A rated notes 4bp wide of recent tights
More articles
More articles
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CLO equity investors at SFIG Vegas were in an upbeat mood in a panel discussion on Monday, but with rate rises and political risks looming they said this was no time to get comfortable.
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The first Republican attempts to scale back the Dodd-Frank Act following Donald Trump’s November presidential election victory are on the horizon, with The House Financial Services Committee gearing up to vote on a new bill as early as March. -
With policymakers discussing the possible extension of “simple, transparent and standardised” securitization to synthetic transactions, a push is underway to promote the quality and importance of the asset class.
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As US CLO managers explore ways to boost returns on new deals, longer reinvestment periods could be introduced to appease equity buyers, though debt investors may not accept the trend quietly.
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Investor demand for exposure to global loan and CLO products has prompted GSO/Blackstone’s listed Loan Financing Fund, which invests in US and European senior secured loans both directly and through CLO debt, to plan a new share issue.
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Demand for US CLO triple-A paper is at its peak, with sources saying that competition for the bonds is squeezing out the Japanese buyer base that has long been a driver of the market.
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Despite many UK-based CLO managers switching to the manager originator model for European risk retention in the immediate aftermath of the Brexit vote, many are returning to the sponsor route, with investors comfortable with either approach.
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With primary European CLO spreads hitting some of their tightest levels since the financial crisis, better value could be found in more seasoned deals coming up for refinancing, said TwentyFour Asset Management on Monday.
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Deutsche Bank is telling investors that it may be time to place bets against the CMBS market, as mounting problems in the retail sector threaten the health of some post-crisis bonds heavily exposed to lower quality retail properties.
