CDOs

The ratings agency reported that the average percentage share of triple-C rated loans in CLO portfolios fell below 10% for the first time since March.

The quarterly numbers were boosted by $11.3 billion in new deals last month, the most active month for CLOs since April 2019.

Credit research analysts cite a "significant" drop in defaults since the 2Q and improving macroeconomic indicators.

Spreads and investor demand make conditions ripe for a surge in CLO deals before the election, but a strain on loan supply may complicate the picture.

Brigade Capital Management, Blackstone Group Inc., CIFC Asset Management and Bardin Hill Investment Partners are among the firms looking to change the terms of the CLOs they oversee to put them on better footing when companies they’ve lent to can’t meet their obligations. Collateral managers are often handcuffed in distressed situations due to strict checks on the risks they can take.

The Charlotte, N.C., company recently closed on a sale of its Cohen Financial platform to SitusAMC.

“The Fed has made it clear that they don’t want a liquidity problem in the Treasury market or the higher-grade corporate market,” Fuss said. “They cannot, unfortunately, underwrite lending in the private markets.”

Private equity firms are hitting the U.S. leveraged loan market at the fastest pace in years to fund shareholder payouts with about $8.6 billion of dividend recapitalization deals launched this month.

Deals, trends and research in structured finance and asset-backed securities for the week of Sept. 11-17

After a boom in corporate distress when economies shut down to deal with the pandemic, 2020 had been expected to be the biggest bankruptcy year ever. The pace of bankruptcies was widely expected to pick up after last month, which was slower than May-July, but still the worst August on record.

Deals, trends and research in structured finance and asset-backed securities for the week of Sept. 4-10

KKR & Co. is looking to grow its asset-based private lending business to capitalize on a retreat by banks and more traditional market participants in the wake of the coronavirus pandemic that has led to mis-priced risk.

The debut fund chose an unmistakable ticker (AAA) to market the relative safety of the CLO that is often unfairly attributed with the risks of the pre-crisis CDO.

A three-month drought in CRE CLO issuance came to an end this week with new deals from Exantas and A10 Capital.

Deals, trends and research in structured finance and asset-backed securities for the week of Aug. 28-Sept.3

More than 2,500 Fitch-rated structured finance transactions face significant challenges transitioning from Libor to an alternative floating-rate benchmark, but the ratings agency doesn’t foresee that resulting in potential ratings downgrades until 2022.

The class A notes, secured by legacy trust-preferreds and subordinated debt of institutions, carry an investment-grade A1 rating from Moody's. That rating is slightly lower than a prior Hildene CDO, due to elevated pandemic risk to bank profitability.

The worst recession since the Great Depression is prompting indebted companies to default, and increasingly more will do so in a way that’s harder for investors to detect.

First, J. Crew. Now Neiman Marcus. Flashing red: J.C. Penney, Hertz and many more. The coronavirus has crushed the life out of some venerable household names.

Of 900 deals reporting data over the last month, 21% have narrowed or eliminated payments to the equity. Some analysts expect about one in three deals will eventually limit payments to their riskiest securities.