Latest news
Latest news
An interview with Propel and the BBB, a busy Q1 for ABS, more arb headaches for CLO managers
Resets for 2021 and 2024 deals are less attractive to managers due to wider liability pricing
Spreads for the triple-A rated notes were similar to the manager's previous deal
More articles
More articles
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US banks that hold non-Volcker-compliant CLO paper have finalised a set of standardised supplementary documentation and proposed the changes to CLO market participants, in a concerted effort to bring the deals into line with the incoming regulation. But not everyone is convinced that managers will bite. -
CLO managers in the US are finding demand from an ever-broader range of investors. The recent glut of issuance looks set to continue into July, with Neuberger Berman the latest addition to the pipeline. But strong triple-A demand cannot continue forever without large bank investors, so the market is watching Volckerisation efforts closely.
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Blackstone/GSO and Pramerica are vying to take European CLO 2.0 supply over €5bn this year as the asset class continues to exhibit strong performance, with risk appetite pushing up the proportion of cov-lite loans in portfolios.
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US banks that hold non-Volcker-complaint CLO paper have finalised a set of standardised supplementary documentation and proposed the changes to CLO market participants, in a concerted effort to bring the deals into line with the incoming regulation. But not everyone is convinced that managers will bite.
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Citi has combined its structuring groups for credit and residential real estate products, expanding the responsibilities of its head of European CLOs and several directors to reflect the reorganisation.
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US CLO deals have been getting larger in recent weeks, with triple-A demand said to be becoming broader as bank investors look to get back into the market — even as regulators appear to be inflexible on banks’ attempts to Volckerise their legacy CLO holdings. Hedge funds continue to look at leveraged triple-A investments, but the market is split on the magnitude of this activity.
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The pipeline of new CLO issuance continues to swell, shrugging off some of the summer malaise afflicting other parts of the capital markets. Although only one broadly syndicated loan CLO was priced this week, some seven deals were marketing as of Thursday afternoon, with triple-A demand described as “robust”.
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The Officer of the Comptroller of the Currency, one of the US federal agencies tasked with implementing the Volcker rule, has reportedly said it will not accept bank investors waiving their right to remove and replace CLO managers as a way of making legacy CLO transactions Volcker-compliant.
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The Officer of the Comptroller of the Currency (OCC), one of the US federal agencies tasked with implementing the Volcker rule, has reportedly said it will not accept bank investors waiving their right to remove and replace collateralised loan obligation (CLO) managers as a way of making legacy CLO transactions Volcker-compliant.
