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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CIFC made headlines last week when it announced that it had engaged JP Morgan to explore “a range of strategic alternatives” to its business model, but rumours of a definitive sale or merger with another manager are premature. -
The US CLO market is looking to Japan and other Asian markets in order to find triple-A buyers as the pool of investors interested in the debt continues to shrink.
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CLO managers and investors may want to look beyond the struggling commodities sector for signs of default risk, as idiosyncratic and one-off defaults in industries such as healthcare and retail will also pressure the CLO market in 2016.
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Mezzanine CLO spreads have widened in the secondary trading as credit markets remain under pressure from the widespread volatility that has characterized the year so far.
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The first US CLO deals of 2016 were priced on Monday, after being held up last week by investor concerns over widespread volatility that wreaked havoc across financial markets.
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The weakening credit quality of exploration and production and oilfield services companies is threatening to take its toll on the US CLO market.
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The median default holdings among US CLO 1.0 defaults grew by 19bp from September to October 2015 to 1.75%, according to CLO research from Moody's Investors Service.
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Volatility has slowed the pricing of the first US CLO deals of the year as debt investors seek wider spreads amid deepening uncertainty in the broader markets.
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The US CLO market will likely see issuance fall this year, despite a flurry of deals in the last quarter of 2015, as concerns over risk retention continue to keep the market awake at night.
