CDOs/CLOs

The likely extension of support of Libor until June 30, 2023 is a major plus for the securitization market, fending off potential market disruption the buying and trading of $1.8 trillion in outstanding asset-backed securities because of the planned cessation of the benchmark rate by the end of 2021.

Deals, trends and research in structured finance and asset-backed securities for the week of Dec. 11-17

Investment firms and hedge funds are increasingly engineering bankruptcy loans and side deals to take control of Chapter 11 reorganizations from the outset, locking in rich rewards for themselves while potentially locking out rivals and lower-ranking creditors with little transparency. The trend is sure to speed up cases, but it also forces judges to make quick decisions that may shortchange some valid claims.

Promising vaccines may not reach the general public fast enough to save a number of struggling companies next year, and workout professionals and distressed investors are expecting smaller private companies will search for cash in 2021. They’re also anticipating that businesses of all sizes may struggle to adjust to changing consumer habits in a post-pandemic world.

Risk premiums for new transactions, which package and sell leveraged loans into tranches of varying risk and potential return, have tightened to pre-pandemic levels and Wall Street predicts a rise in sales in 2021.

Deals, trends and research in structured finance and asset-backed securities for the week of Nov. 28-Dec. 3

DCI, which oversees about $7.5 billion in assets, will become a part of Blackstone’s $135 billion GSO operation, which was recently rechristened Blackstone Credit.

York Capital Management told its investors this week that it was all but getting out of the hedge-fund business to focus on its $8.5 billion in longer-term products.

U.S. bankruptcy filings have slowed nearly to a halt, but they’re expected to pick up next year, led by companies that piled on debt to survive this year’s pandemic and election-related volatility.

The $175.9 million securitization of legacy trust-preferred securities issued by community banks prior to 2007 carries a double-A rating from Moody's.