CDOs

Deloitte & Touche recently named two co-leads for the CLO services unit of its securitization practice, Hillel Caplan and Lynda Lazzari.

Prices of loans held by CLOs recovered again in April, giving managers some more breathing room. But funding costs, rising interest rates and credit deterioration remain a challenge.

Despite the deterioration in their CLO holdings, BDCs appear to be maintaining their dividends and appear to be in no particular hurry to unload holdings.

One of the biggest challenges in putting new CLO deals together has been the decline in the number of buyers of CLO debt. Justin Plouffe, managing director of U.S. and European CLOs at The Carlyle Group, discusses the means to which managers must adapt to market direction.

U.S. collateralized loan issuance showed encouraging signs of revving up last week as seven U.S. deals hit the market, bringing the final April tally of transactions to 16.

For the first time since the financial crisis, some collateralized loan obligations are being forced to divert funds normally used to pay junior noteholders to be used for the benefit of more senior noteholders.

Onex Credit Partners is launching its first CLO of 2016, and 11th overall, following up a 2015 when the private equity group issued three collateralized loan obligations of mostly similar sizes.

Invesco Senior Secured Management has priced a new $406.25 million CLO with a high ratio of first-lien secured loans already identified for the portfolio.

Credit managers are less pessimistic about widening spreads over the next three months, but are growing more worried about a worsening global corporate default trend, according to the latest quarterly IACPM survey.

The long-time slump in oil prices is negatively affecting a narrow band of CLOs and asset-backed securities invested in energy industry assets. But the lower fuel costs are bringing improved consumer payment performance on mortgages and car loans, according to Moody’s.

Carlyle Global Market Strategies Euro CLO 2016-1 was launched with target par of €400 million (US$457.1 million). Credit Suisse Asset Management is also looking to issue €400 million in notes through Cadogan Square CLO VII B.V.

Napier Park Global Capital it preparing to price its first CLO in nearly 18 months through its Regatta platform in a $411 million transaction arranged through Morgan Stanley.

Topped by a $355.6 million, triple-A rated Class A notes tranche, the Hertz Fleet Lease Funding (HFLF) LP Series 2016-1 carries similar structures to the previous issue in the 2015-1 version, with the exception of the inclusion of a split floating-/fixed-rate split of Class A notes.

N.M. Rothschild and Sons’ Five Arrows Managers LLP has extended the closing date to April 26 for the €307M Contego III trust deal out of The Netherlands.

Jeremy Ghose, a veteran London-based CLO manager, is unsure the launch of five new Euro-denominated collateralized loan obligations in March is a sign the market is staged for a surge in 2016 – even though one of the new issues was by his own firm.

With the pricing of five new deals since mid-March, the European collateralized loan obligation market has broken out from a slow start in 2016 to put itself on pace to match, or exceed, 2015 new-issue volume levels.

The Los Angeles-based manager, a unit of Canyon Capital Advisors, is issuing its first CLO in nearly a year through Canyon CLO 2016-1. The transaction is a follow-up to the $400 million Canyon Capital CLO 2015-1 issuance in April 2015.

3i Debt Management priced a €400 million European collateralized loan obligation, according to Moody’s Investors Service.

Buyers of broadly syndicated corporate loans currently have an incentive to drag their feet closing trades; they will soon pay a hefty price if they don’t do their part. The reform should help lenders get assets off their books faster.

European CLO manager CVC Credit Partners is preparing its first broadly syndicated loan portfolio of 2016 that will issue €400 million (US$447.3 million) in euro-denominated bonds.