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
More articles
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With three weeks in the year still to go, US securitization volume has reached a post-crisis high of $474bn, according to S&P Global Ratings. -
NatWest has taken advantage of robust market conditions and improved its capital position with a synthetic securitization of loans called Nightingale 2017-1.
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Investors pulled $6.8bn from US high yield mutual funds last week, but spreads ended last week unchanged and a busy line-up of issuers have crowded the primary deal pipeline.
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Yield-chasing investors are piling into US direct lending, and the move is taking its toll on credit underwriting. Cov-lite terms and more aggressive leverage are seeping into the traditionally conservative middle market space, even as the spreads on offer track tighter to the larger broadly syndicated market.
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The US high yield market suffered a volatile week, with pulled deals, wider spreads and billions of dollars of retail investor outflows, but a string of determined issuers and hardy investors keen to pick up bargains meant the sell-off did not result in a full blown market rout, as many had earlier feared.
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European ABS issuers have rushed the primary pipeline this week, bringing as many as seven deals to market as the push to year end begins.
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The European CLO market is showing no sign of cooling down going into year end, with investor demand stronger than ever and heightened Japanese interest driving spreads tighter.
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Investor thirst for yield has pushed the price of the riskiest pieces of CLO debt well above par, but market participants say that many investors are underestimating call risk as they hunt for value.
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Last week was the second busiest week of issuance in the global CLO market in the post-crisis era, but refinance and reset activity is set to dominate the sector for the remainder of the year, a move which is likely to facilitate further price tightening in the leveraged loan market.
