CDOs/CLOs

A spring survey of European asset-backed portfolio managers shows a vast majority expects to increase their securitization holdings in 2016. But many see a “muted level” of issuance in which to add securities, according to the DBRS polling.

EU Parliament member Paul Tang shocked the region’s securitization industry last week when he proposed increasing the amount of “skin in the game” for asset-backeds, by four-fold, to 20% from 5%. He's giving the keynote at IMN's Global ABS conference

The $2.8 billion in CLOs that have priced this month is not enough to reverse the sluggish 2016 CLO market, which is down over 50% in both deal count and dollar volume compared to mid-2015. But six deals to date in June are pacing toward a third straight month of collateralized loan obligation deal volume topping $5 billion.

Middle market CLOs have never recovered the role that they played in lending to small and medium-sized companies before the financial crisis; that could change now business development companies and other alternative lenders are under pressure.

In a report published Tuesday, Wells said that retailer loans held by collateralized loan obligations are performing as well, if not better, than most of other loans in CLO portfolios, outside of the oil and gas industries. In addition, only 8% of retail loans in CLOs are trading under $80.

A committee convened by the Federal Reserve to examine potential replacements for widely used interbank offered rate benchmarks has published its interim conclusions, identifying two potential alternatives.

Marketplace lenders may be able to teach banks a thing or two about speeding up loan origination, but when it comes to securitization, they could use a few pointers themselves.

The ranks of CLO investors may have thinned this year amid broader bond market turmoil, but it can still be difficult to put money to work with the best managers.

Speaking at IMN’s 5th annual conference on leveraged loans and collateralized loan obligations, LSTA executive Meredith Coffey and SFIG executive director Richard Johns each gave sobering assessments of the inevitable, and possibly debilitating, arrival of new capital ratio and risk retention standards to CLOs and other ABS deals.

Some 69% of collateralized loan obligations completed so far comply with impending risk retention rules, according to Meredith Coffey, research director at the Loan Syndications and Trading Association..