Investments

As life insurers increase their investment in CLOs, regulators are asking questions about how the firms manage risk-based capital.

Contenders see plenty of room for the market of EFTS investing in CLOs to grow. The question is if they can potentially usurp some of banks' dominance in AAA-tranche investing.

The transaction is a reset CLO, where the maximum weighted average life on the deal is reset to nine years, in that case, and the non-call period is reset to 2.2 years as of the refinancing date.

Federal Reserve Vice Chair for Supervision Michael Barr said in a speech Tuesday that banks might need to establish margin to counteract counterparty risks presented by private funds.

Treasury yields retreat from 2024 highs with month-end in view

The trend gained momentum this week, when there was strong demand for contracts wagering that 10-year yields will breach 4.5%, a level they haven't exceeded since November.

The public retirement fund, one of the biggest in the US, said four years ago it would review all of its fossil-fuel holdings as it sought to reduce investment risks linked to climate change.

Treasuries sold off, with two-year yields hitting the highest since before the December central bank "pivot." Swap traders ratcheted down their expectations for a Fed cut before July.

Alyssa Irving sees bright production prospects for 2024 for a range of securitization assets, as the industry awaits rate cuts.

Indeed, investors are also positioning for Friday's consumer-price index revisions because of what happened a year ago: the update was significant enough to cast doubt on overall inflation progress.

Yields across the maturity spectrum climbed as much as 10 basis points on the day, reaching session highs after the ISM gauge of service-sector activity for January exceeded economist estimates.

The share of loans in Arbor's CLOs that failed to make a scheduled payment more than doubled in the fourth quarter, according to preliminary data compiled by Banco Santander SA.

Investors tightening their credit pocketbooks is creating opportunities for lenders. Firms like Värde can step into the gap, buying assets from banks and investing in fixed income.

The Treasury Department is expected on Wednesday to follow through on its November guidance of a third round of increases in its so-called quarterly refunding auctions of notes and bonds.

Truist sold $3.5 billion of bonds in two parts. The longest portion, an 11-year fixed-to-floating rate security, yields 162 basis points above comparable Treasuries.

The segment demonstrated sustained resilience in the third quarter, growing its share of the market each month amid rate volatility, according to Corelogic.

The transaction is collateralized by at least 95% senior secured loans, cash, and eligible investments, S&P says.

The year-end yield on the bond, a global anchor for markets and U.S. mortgage rates, is the culmination of a stunning rebound for Treasuries.

The U.S. may be less rate-sensitive than other countries due to its long-term mortgages but could face tighter credit from hard-hit financial institutions.

The riskiest tier of the junk bond market, CCC, has gained nearly 20% year to date on a total return basis, making it the best-performing asset class in the U.S. fixed-income market.