Optimism among market participants regarding CLO issuance in 2012 appears to have increased in the past few weeks.
According to Moody’s Investors Service, market participants expect between $15 billion and $25 billion in new CLOs this year. This is up from projections from analysts, which ranged from $12 billion to $20 billion at the end of 2011, and shows a general improvement in the mood of the market. In December, the $20 billion projection was considered optimistic. Total issuance last year was roughly $13 billion, according to Moody’s.
In the January edition of CLO Interest, analysts from Moody’s explain that the $15 billion to $25 billion range emerged from one-on-one meetings with CLO managers, investors, and bankers, at the American Securitization Forum's conference last month.
The increased optimism is probably due to a robust start to the year. So far, issuance stands about $2 billion, almost double last year’s level at this time, according to Standard & Poor’s. Recently printed transactions include a $430 million deal for Ares Management, a $436.7 million deal for Apollo Global Management, and a $410 million CLO for LCM Asset Management.
Meanwhile, Citigroup is raising a CLO to be managed by Onex Credit Partners, with a target size of $300 million, according to Bloomberg.
