CDOs/CLOs

While collapsing market prices do not present immediate worries for CLO managers, the prospect of future downgrades and defaults becomes more problematic.

Prices for major term loans issued by operators such as Marriott International, Hilton Worldwide and Caesars Entertainment have fallen in recent weeks as investors grow worried about the impact of the COVID-19 outbreak on global tourist and business travel.

Banks may be protected from a direct hit, but they have invested in vehicles that include such loans, potentially exposing them to defaults.

If JPMorgan, Credit Suisse and Macquarie Group aren’t able to find enough takers of bonds and loans funding El Dorado Resorts' acquisition of Caesar's Entertainment, they may have little choice but to offer the debt at a steep discount.

Asset manager PGIM Inc. is looking to at least triple its investments in the growing direct lending market where it wants to compete with banks to fund mid-size companies outside of the buyout space.

Ample access to cash and debt, along with strong diversification strategies built into investment portfolios, will help asset managers and junk-rated corporate borrowers absorb any near-term substantial economic headwinds, according to Fitch Ratings.

ALM 2020 includes a $1.375 billion Class A1 series of notes that have a three-month Libor spread of 108 basis points, well within the average primary AAA spread of 133 basis points over Libor.

A leading law firm in The Netherlands is mulling an appeal against the Dutch authorities’ decision to charge VAT on the management fees of collateralized loan obligations.

LibreMax Capital is launching its first ESG-compliant deal through its CLO firm Trimaran Advisors LLC.

A proposed change could resurrect bond buckets, but loan industry observers also point to "covered fund" changes shielding loans from a potentially disruptive court decision.