CDOs/CLOs

A court victory in favor of plaintiffs could bring chaos to to capital flow for corporates, LSTA argues

CLO managers are again turning to an old tool, the combo note, to attract more investors for deals’ higher-risk equity stakes.

The carrier, through CLO management affiliate Park Avenue Institutional Investors, is bringing total AUM in senior loans to $1.65 billion.

After a decade of investing in distressed trust-preferred securities CDOs of small and regional banks, Hildene now sees non-distressed CLO equity as an inviting target.

A strong supply of nearly 10 billion euros ($11.2 billion) masks a market that is requiring arrangers and managers to work for less in order to price deals.

Five new-issue deals pricing Thursday pushed monthly primary CLO volume to $13.8 billion, with $43 billion year-to-date now 7% ahead of the new-deal output in the first four months of 2018.

The $505 million Octagon Investment Partners 20-R will close before the assignment of any underlying loans, according to Moody's.

An industry working group might seek legislation to eliminate the need for investor consent in the shift to a new benchmark interest rate. But any legislative fix is almost certain to be challenged because choosing an alternative to Libor will inevitably favor one party in a transaction over another.

The manager's Sound Point Euro CLO 1 Funding DAC is the only deal so far in 2019 to be issued for a first-time issuer in the EU region.

The initial portfolio for the $601.7 million deal features high exposure to lower-rated single-B loans, though that will likely drop when it is fully ramped.