CLOs

Many of the biggest buyers of leveraged loans are facing pressure to cut back on their purchases as they run out of time to reinvest their money.

The strains are largely linked to aggressive rate increases by the Federal Reserve and central banks around the world, which have dramatically changed the landscape for lending.

The asset manager is raising $372 million, and managing a portfolio with higher than average rates of turnover and overlap in collateral composition.

European banks are snapping up large pieces of their own collateralized loan obligations, keeping the market for CLOs afloat in the absence of the U.S. and Japanese banks.

Stabilization in the leveraged loan and high yield bond markets has led to an opening for deals as banks try to reduce debt on their balance sheets before the holidays.

Corporate borrowers will consider tapping bond and loan markets in the coming week as lending costs drop and investors snap up debt ahead of 2022's close.

In the proposal, NAIC argues that an insurer purchasing every tranche of a CLO holds the same investment risk as purchasing the entire pool of loans backing the CLO.

The deal has a $40 million subordinated portion that compares to the $497 million Dryden 108 CLO Ltd., which has a much larger ‘AAA’-rated class A-1 portion.

Natixis’s co-head of structured credit and credit trading has left the bank to join New York-based private equity shop Blue Owl Capital, as the firm seeks to step up its efforts in the collateralized loan obligation market.

Mizuho Securities’ head structurer of collateralized loan obligations has joined New York-based private equity firm Blue Owl Capital as it makes a push into the broadly syndicated CLO industry. 

Citigroup and Bank of America have teamed up with five other banks to form Octaura Holdings, an electronic trading platform for syndicated loans and collateralized loan obligations.

The Neuberger Berman pool has an average credit quality of ‘B’ on the indicative portfolio, which indicates a highly speculative credit quality.

On average, CLOs had a default exposure of 0.1% at the end of May, according to the latest update from Fitch Ratings.

Over the next three decades it will cost about $100 trillion to meet net-zero emissions goals, not to mention the funds needed to address other environmental and social problems.

A return by the Japanese bank, even on a smaller scale than previously, would inject fresh demand into a European market where CLO costs have spiked to the highest in two years.

The drop in CLO issuance from Q1 volume raised no alarms, coming off last year’s record $187 million issuance, and experts see strong production for 2022.

The past few weeks have seen no fewer than five acquisitions of U.S. alternative credit shops that specialize in CLOs or bundles of the securitized vehicles.

Despite perceptions that smaller companies are riskier, they pose less risk to investors. Realized loss rates are lower, and they deliver higher returns.

The U.S. economy is relatively insulated from the events unfolding in Eastern Europe. Western Europe may be affected indirectly by higher energy prices.

The transaction, expected to close on March 2, has a non-call period end date of two years from the expected closing, a reinvestment period end date of April 15, 2026.