CLOs

The U.S. leveraged loan market is springing back to life with new deals for T-Mobile US Inc. and Delta Air Lines on deck for investors willing to take on risk.

Rising default levels have produced strain on many collateralized loan obligations, many of which are now approaching breaches of covenant tests on minimum weighted-average ratings factors and maximum holdings of triple-C rated loan assets.

The Distressed Credit Opportunities Fund III money pool, dubbed Disco III, will target leveraged loans, high-yield bonds and collateralized loan obligations.

According to a new academic research report, CLO managers have taken advantage of S&P's ratings methodology for a ratings boost on lower-rated tranches - enabling them to offer more return for what seemed like less risk.

Moody’s Investors Service has placed hundreds of non-senior U.S. CLO tranches under review for downgrade, affecting 358 broadly syndicated loan-backed portfolios as Moody’s measures the ongoing economic shocks of the coronavirus outbreak.

Analysts and ratings companies are sounding alarms as a number of BDCs rush to shore up finances, or throw lifelines to their heavily indebted borrowers.

Oaktree Capital Management LLC was a “strong buyer” of corporate debt last month during the selloff brought on by the coronavirus pandemic, according to Howard Marks, co-founder of the distressed-investment specialist.

Bank research reports note the loans will only apply to purchases of CLO notes backed by newly issued leveraged loans. Most recently launched deals involve warehoused or distressed secondary-market loans ineligible for TALF.

Fitch expects a majority of European CLO junior notes to be placed on a potential downgrade watch due to enhanced evaluation for coronavirus-related stresses.

In the last two quarters of 2019, according to Fitch Ratings, more U.S. managers of collateralized loan obligations (CLOs) had been structuring some of their transactions to comply with risk-retention rules.

ABS participants saw markets freeze and were bracing for worse when federal aid provide a short-term respite. The question now: How much trust can anyone put in the medium-term and beyond?

For years, regulators have tried to make the financial system safer by blocking banks from taking on the extreme leverage that almost toppled the industry in 2008. Turns out, the risks just moved.

Royal Bank of Scotland Group Plc is pressing ahead with its restructuring plan, trimming its securitized credit team in London even as many of its peers halt job cuts amid the chaos caused by the coronavirus outbreak.

The collapse of dine-in revenues for restaurant chains during the outbreak is placing whole biz deals under the ratings microscope.

Hedge funds are making headlines daily with plans to capitalize on this rapid shift in the outlook, contending the market presents a once-in-a-lifetime opportunity

Fitch Ratings has placed subordinate notes on two U.S. collateralized loan obligations on notice for potential downgrades, contemplating a ratings action that has not previously occurred for a post-crisis CLO.

Direct lenders around the world are talking with borrowers about easing interest payments, waiving penalties and relaxing covenants as they assess the growing damage to their portfolios caused by the coronavirus pandemic.

The amount of distressed debt in the U.S. has quadrupled in less than a week to nearly $1 trillion, reaching levels not seen since 2008 as the collapse of oil prices and fallout from the coronavirus shutters entire industries across the globe.

Dramatic Fed intervention may steady some markets, but unless something changes — and, judging by the last two weeks, it very well could — the central bank won’t be there to save fallen angels. Which brave investors will step up?

Red flags and warning signs from February should have prompted investors to make “all the wise decisions" at that time, says Ville Talasmaki of Finnish financial group Sampo Oyj.