CLOs

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.