After declining in each of the three previous months, issuance of U.S. collateralized loan obligations picked up in October to $8 billion, its highest level since June, according to Thomson Reuters LPC.
That brought volume for the year to date to $86.2 billion.
That’s well shy of the $105 billion issued at the same point last year.
By the end of 2014, a total of $123.5 billion of CLOs had been issued; full-year forecasts for this year are for below $100 billion.
The average size of CLOs backed by broadly syndicated loans edged up to $508 million in October, with deals ranging in size from $404 million to $818 million.
The average deal size this year is $534 million.
In Europe, two deals totaling €720 million priced in October, bringing 2015 issuance to €11 billion. That’s just below the figure of €11.7 billion recorded in the same period a year ago.
The top loan holdings in U.S. CLOs are Valeant Pharmaceuticals at $3.64 billion, followed by First Data Corp. at $3.51 billion and Asurion Corp. at $2.89 billion.
The top loan holdings in European CLOs are Numericable SAS at €1.108 billion, followed by ZIGGO BV at €1.016 billion and eircom Group Plc at €939 million.
U.S. CLO issuance has been held back, in part, by the relative scarcity of collateral. In the first 10 months of the year, there has been $581 billion of leveraged loans issued, down significantly from the $828 billion recorded in the same period last year.
The drop in volume is much more pronounced in the institutional market, where loans are syndicated among large investors, compared with the pro rata market, where loans are syndicated among banks. High equity valuations and competition from strategic buyers have kept the volume of deals backed by private equity firms down, according to Thomson Reuters LPC.