CDOs

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.