CDOs

High investor demand for collateralized loan obligation paper is squeezing spreads to their tightest levels in more than a year, even as improving monthly CLO issuance has reached its highest level of 2016.

Mid-market commercial direct lender Newstar Financial is losing one of its founding members and a key figure in establishing its multi-faceted securitization platform with the announced retirement of treasurer and asset management head John Frishkopf.

The recent and ongoing upheaval in Libor rates is producing divergent outlooks on debt and equity positions in CLOs, says the Loan Syndications and Trading Association.

Rules requiring CLO managers to keep skin in the game of their deals has taken a toll on smaller firms. But the resulting thinning of the ranks has created room for some new players that are better capitalized, including insurance companies.

The Loan Syndications and Trading Association has finalized a rule designed to speed up settlement of leveraged loans.

The rating agency in the second quarter upgraded 149 tranches of senior, mezzanine or subordinate notes across 49 CLOs. By comparison, it downgraded just 13 tranches of six CLOs.

Allen & Overy has added a team of five partners specialized in leveraged financings to its New York office.

Despite efforts by regulators and banks to improve underwriting of commercial leveraged loans, the number of troubled large syndicated credits jumped again this year, according to a report released Friday by federal regulators.

EJF Capital is marketing $333.75 million of notes backed by trust preferred securities issued by banks and insurance companies.

Since 2013, CLO Managers have been issuing notes with rates that are initially low, but step up after 18 to 24 months, betting that they can refinance them more cheaply; so far their success has been mixed.

Leveraged loan market participants will have to wait a little longer for a big change meant to speed up trade settlement.

An unusual way of attracting investors in the riskiest slices of collateralized loan obligations is coming under scrutiny.

Many energy lenders have begun to sour on shared national credits after years of using the hefty loans to bulk up their balance sheets.

U.S. CLO issuance gained traction in the second quarter, as the dollar volume of deals more than doubled after a sluggish start to the year. Nearly half the respondents in the survey now project CLO issuance to reach about $45 billion for the full year, well below forecasts made at the start of the year.

An eventual "Brexit" from the European Union could exclude CLO managers and investors from the CLO market under existing and proposed EU rules that restrict risk-retention and market activity to EU regulated firms.

DFG Investment Advisors has raised a $100 million fund that it will use to satisfy impending regulations enacted as part of the Dodd-Frank Act requiring CLO managers to have “skin in the game” of their deals.

The economics of actively managing a pool of leveraged loans for the benefit of several different classes of investors is not good. So some CLO managers are putting their deals on autopilot.

A spring survey of European asset-backed portfolio managers shows a vast majority expects to increase their securitization holdings in 2016. But many see a “muted level” of issuance in which to add securities, according to the DBRS polling.

EU Parliament member Paul Tang shocked the region’s securitization industry last week when he proposed increasing the amount of “skin in the game” for asset-backeds, by four-fold, to 20% from 5%. He's giving the keynote at IMN's Global ABS conference