CDOs/CLOs

Despite a recent pickup in new issuance of both collateratlized loan obligations and the leveraged loans used as collateral, many participants at an industry conference see more trouble ahead.

There’s a real downside to extremely low or even negative interest rates. Existing CLOs may not earn enough from their euro-denominated assets to pay the interest on the notes they issue.

Deloitte & Touche recently named two co-leads for the CLO services unit of its securitization practice, Hillel Caplan and Lynda Lazzari.

Prices of loans held by CLOs recovered again in April, giving managers some more breathing room. But funding costs, rising interest rates and credit deterioration remain a challenge.

Despite the deterioration in their CLO holdings, BDCs appear to be maintaining their dividends and appear to be in no particular hurry to unload holdings.

One of the biggest challenges in putting new CLO deals together has been the decline in the number of buyers of CLO debt. Justin Plouffe, managing director of U.S. and European CLOs at The Carlyle Group, discusses the means to which managers must adapt to market direction.

U.S. collateralized loan issuance showed encouraging signs of revving up last week as seven U.S. deals hit the market, bringing the final April tally of transactions to 16.

For the first time since the financial crisis, some collateralized loan obligations are being forced to divert funds normally used to pay junior noteholders to be used for the benefit of more senior noteholders.

Onex Credit Partners is launching its first CLO of 2016, and 11th overall, following up a 2015 when the private equity group issued three collateralized loan obligations of mostly similar sizes.

Invesco Senior Secured Management has priced a new $406.25 million CLO with a high ratio of first-lien secured loans already identified for the portfolio.