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
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The European CLO primary market is going strong as the market heads into late summer, with a slew of deals sold over the last week and buyers eyeing more to come. -
Long term investors such as insurance companies and pension funds are buying more mezzanine and junior CLO debt as spreads compress. Meanwhile, asset managers and hedge funds appear to be taking more defensive positions in what they say has become a rich market.
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Valeant Pharmaceuticals, the largest single company exposure in the US CLO market, announced a $500m debt redemption on Thursday with one investor saying debt holders would struggle to find similar returns in the current loan market.
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The direction of central bank policy is increasingly coming to govern Investment grade and high yield bond investors' hunt for yield, with many of the latter now looking to triple-C rated paper to better hedge against the risk of rate hikes.
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The US new issue CLO market sparked back into life this week, with four new deals sold in addition to refinancing and reset activity. Investors have shifted down the capital structure and driven the US CLO credit curve to its flattest level in three years.
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NewStar Financial has added around $726m of assets under management after buying Fifth Street Asset Management’s middle market CLO business, which had two outstanding deals.
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Some market observers are growing wary of downside risk in the US CLO market, with a raft of deals being priced at levels at or close to post-crisis tights.
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Banks have approached rating agencies with an eye on possibly securitizing portfolios of private equity fund investments, like the collateralized fund obligation that was priced last week, as credit investors search more widely and deeply for assets with yield.
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Issuance of leveraged loans hit $548bn in the first half of this year, setting a record for any first or second half, according to S&P Global Ratings.
