The CLO market has had dark clouds overhead since the credit storm began, and occasionally there have been downpours of liquidations and forced selling. As the storm lingers, market participants differ on their view of the forecast some believe there will be another wave of liquidations, others believe the market will remain calm.
The most recent liquidations happened during the last three months of 2008, when approximately $5.7 billion in loans were put up for sale, according to Standard & Poors Leveraged Commentary & Data. The forced selling slowed down in the first quarter, with only $1.5 billion on the block. However, just over the past several weeks, the number of bids wanted in competition, many of them CLO portfolios, has reached almost $1 billion.