Latest news
Latest news
Deals from the second half of 2024 may not be in the money for resets with triple-A pricing remaining sticky
Portfolio mixes financing originated by Barings and public infrastructure debt
European CLOs have fewer negative cash balances as managers avoid weaker credits
More articles
More articles
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In a quiet start to the US CLO market in 2018, only reset and refinancing deals have emerged so far, but Wells Fargo is predicting a record year of issuance for the asset class. Some investors are pulling back, however, as loan market fundamentals show signs of deterioration. -
The Carlyle Group has raised over $800m for its Carlyle Structured Credit Fund, which will invest in the CLO debt of third-party managers in the US and Europe.
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Fitch Ratings’ 2018 leveraged finance outlook forecasted benign credit conditions for next year on Wednesday, but constricted supply and strong CLO demand is expected to lead to further erosions in documentation, analysts said.
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TwentyFour Asset Management said this week that it favours a defensive position in European securitization, given tight spread levels. The firm sees value in CLOs, but cautions that manager behaviour could be a growing risk next year as the credit cycle matures.
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The final version of the government’s tax reform bill that the US congress will vote on this week is tough on highly levered US companies, said Fitch on Monday, but most analysts believe the changes won’t significantly dent appetite for corporate borrowing.
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LCM Capital Management and Carlyle have priced triple-A paper at new lows in recent days. The tightening trend in CLO debt appears relentless. Bank of America Merrill Lynch said on Friday that triple-A notes could drop to around 90bp next year.
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A report from Bank of America Merrill Lynch on Friday said that high yield bonds from US healthcare companies should be trading wider to the rest of the market, given the potential for secular industry changes on the back of regulatory and tax reform risks.
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US leveraged finance sources have blamed a rampant CLO market for allowing borrowers to run riot in the leveraged loan market with loose covenants and declining underwriting standards, trends that look likely to escalate if leveraged lending guidelines are rolled back, writes David Bell.
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London-based credit platform Hayfin Capital Management has signed an agreement to acquire US CLO manager Kingsland Capital Management, giving it exposure to US leveraged loans and high yield credit.
