CLOs

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.