U.S. CLO issuance fell in August, for the second consecutive month, to $6 billion, according to Thomson Reuters. That was the second lowest monthly level this year, and it brings volume for the first eight months of the year to $73.7 billion.
By comparison, at this time last year, issuance of collateralized loan obligations was at $86.1 billion.
The average size of a CLO backed by broadly syndicated loans (as opposed to loans to small and medium sized companies) declined to $547 million in August, with deals ranging in size from $360 million to $800 million.
The average deal size this year is $539 million.
U.S. CLO assets under management edged marginally lower in August to just under $415 billion (based on a universe of 961 CLOs), as repayments outpaced issuance.
CLO assets under management are up $44 billion year-to-date.
Issuance of institutional loans also declined in August, to $27 billion bringing YTD issuance to $216 billion, way below the $368 billion recorded in the same period last year.
Given the constrained supply this year, the institutional loan market has struggled to grow, with outstandings slipping by $800 million in August to $828 billion.
Year-to-date, outstanding debt is down $3.1 billion or 0.4%.
Second-lien loan issuance is at $9.4 billion YTD, far below the $30.8 billion recorded through August last year.
Overall middle market issuance is down 36% year over year.
Middle market lending stands at $84 billion so far this year. This is mostly comprised of large middle market issuance ($63 billion), with traditional MM volume at $22 billion.
So far this quarter, 41% of middle market issuance has represented new money purposes.
Refinancing have accounted for just over half (52%) of issuance this year. At the same point last year, refinancings represented 63% of volume.
CLOs share of the institutional loan market is now at 50%, while loan mutual funds & ETFs currently account for 15%.
The CLO share of institutional loan outstandings has increased to 50%, up six percentage points since the start of the year.
Meanwhile, European CLO issuance through August is at €9.8 billion, exceeding the figure of €8 billion recorded in the same period a year ago.
European leveraged loan issuance is at $114 billion YTD, down from the $168 billion posted in the same period a year ago.