CLOs

The difference between yields on investment-grade debt and junk bonds doesn’t bode well. It’s a sign that leverage in the system is rising.

Outstanding middle-market U.S. collateralized loan obligations in the first quarter had a significantly reduced concentration of near-default loans being held in portfolios compared to year-end 2020

In his annual letter to CEOs in January, he stressed the need for companies to respond to racial injustice, economic inequality and environmental degradation -- all issues traditionally left to government.

Both agencies cited the increasingly sunny economic outlook driven by the reach of COVID-19 vaccination efforts.

Demand is booming this year for securitized debt, as sales have not only recovered following last year’s Covid-induced dip, but are even eclipsing the pace of previous strong years.

Strong growth, continued low-cost borrowing and an oil rally are all contributing to a friendly backdrop for high-yield issuance.

Managers expect to be holding portfolios of loans priced to potentially different benchmarks, which could present a major challenge in trading assets and re-calculating note coupons currently tied to the outgoing reference rate.

STWD 2021-FL2 is pricing a $1.27 billion managed commercial real estate commercial loan obligation that allows the issuer to reinvest principal proceeds.

Deals, trends and research in structured finance and asset-backed securities for the week of April 9-16

Fewer obligors with troubled loans improved default exposure for managers of broadly syndicated CLOs, and provided deeper cushions for overcollateralization tests.