CLOs

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

This year has already seen a glut of corporate failures: there were 177 U.S. bankruptcy filings year-to-date by companies with over $50 million in liabilities, according to data compiled by Bloomberg

There’s been a flurry of interest in so-called fallen angels recently as investors seek alternatives to the ultra-low yields on high-grade debt.

The transaction is the first in two years for MidCap, which provides startup and expansion financing for biosciences/healthcare and technology firms backed by VC and private equity.

The industry’s turmoil, including 'strategic options' being pursued by corporate debt obligors like Transocean and Seadrill, has sparked the biggest wave of restructurings since 2017, when the effects of the last oil price downturn reverberated through the industry.

Investors should consider alternatives such as private credit as they search for positive yield in a world of low or negative interest rates, according to asset manager Nuveen LLC.

As the tally of corporate defaults climbs, the potential for collateralized loan obligation ETFs may pose a risk for retail investors, according to GTS Mischler Principal Reggie Browne.

There is hope among issuers that the structural changes brought about by the COVID-19 pandemic can bolster CLO resiliency, thereby enabling market participants to better weather the next economic storm.

The coronavirus impact in the U.,S. alone has resulted in a 30% year-over-year decline across securitizations, CLOs and MBS.

The big drop in CLO equity this year signals investor fear that this downturn will be more like the 1998 to 2003 period, where company defaults rise and stay elevated over the course of years, and profiting from improving prices in loans is hard.

he report concluded that the industry should fare well compared with its peers, but that loans to mid-sized European companies remained vulnerable to fall-out from Covid-19.

If creditors can now be pushed down the repayment pecking order without notice and have no recourse to fight back, they will be forced to reassess risk – and potentially demand higher interest rates – when granting loans and buying certain kinds of bonds.

The market for private investing has seen assets swell 44% over the past five years, reaching an estimated $18 trillion by the end of 2019, according to JPMorgan Chase & Co. Globally, alternative asset managers have $2.4 trillion available to spend, based on data from Preqin.

King Street's new CLO is the first European deal rated by Moody’s to fail to meet all the portfolio requirements at this milestone.

Money managers including Owl Rock Partners, Pretium and PGIM are racing to add workers with restructuring and bankruptcy experience as they take in record amounts of cash to buy cheap assets battered by the economic fallout of the coronavirus pandemic.