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European CLO market adapts to the challenges of the COVID-19 era


The period since March has been a turbulent time for financial markets, and the CLO sector in Europe dealt with a complex set of disruptions when the pandemic arrived this spring. From sudden and acute stress at the corporate level, to an unprecedented shift in working conditions, CLO players in Europe experienced uncertainty not seen since the last crisis. Yet, the market has adapted, and while the shape and size of deals may be different, CLOs in Europe are pushing ahead. BNY Mellon and GlobalCapital gathered market experts to discuss the present state of the European CLO market and its prospects.

European CLO market adapts to the challenges of the COVID-19 era

Other news

  • Insurers said to explore CLO risk retention structures

    Insurers said to explore CLO risk retention structures

    Credit insurers are said to be dipping into CLO equity risk — not as cash investors allocating to alternative managers, but through directly insuring retention notes. This comes against a backdrop of more interest from insurers in junior corporate risk through the SRT market.

  • JSW Hydro makes a splash with green bond

    JSW Hydro makes a splash with green bond

    JSW Hydro Energy, a subsidiary of Indian power company JSW Energy, sold its first international bond this week, taking $707m from the green transaction.

  • CLO senior spreads tighten again with Invesco

    CLO senior spreads tighten again with Invesco

    Spreads on triple-A notes have once again begun to tighten, following a pause while the market digested the heavy flow of new supply. Market participants expect further tightening could follow from June.

  • Italian issuers say ‘si grazie’ to HY market

    Italian issuers say ‘si grazie’ to HY market

    Monday brought another strong start to the week for European high yield, with six new bonds announced and other deals, such as EQT’s Cerba healthcare financing, set to close this week. Italian issuers led the way, with bonds for International Design Group, Lutech and Cedacri in the market.

  • EQT launches bonds for Cerba buy-out

    EQT launches bonds for Cerba buy-out

    Swedish private equity firm EQT launched senior and subordinated bonds on Monday to finance its acquisition of Cerba Healthcare, the diagnostics company headquartered in France.

  • Ion spreads financing wings, brings in JP Morgan

    Ion spreads financing wings, brings in JP Morgan

    JP Morgan is running the acquisition financing for Ion Investment Group’s purchase of Italian banking software group Cedacri, a major shift for the finance, technology and data group, which has relied on Credit Suisse and UBS to fund its spree of its debt-fuelled acquisitions. The group also turned to high yield bonds for the first time recently, a major departure for a company which once prized the privacy of the loan market.

  • Haid debuts with $400m loan

    Haid debuts with $400m loan

    Guandong Haid Group Co, a Chinese agricultural and animal husbandry company, is in the loan market with its debut offshore borrowing of up to $400m.

  • EQT mixes CO2 and diversity in first SLB from private equity

    EQT mixes CO2 and diversity in first SLB from private equity

    EQT achieved a strong response from investors on Friday when it launched the first sustainability-linked bond from a private equity firm, and only the second from a financial company. The €500m deal is tied to greenhouse gas emission cuts and gender diversity metrics.

  • Jacquet Metal Service leads SSD revival

    Jacquet Metal Service leads SSD revival

    French steel parts and distribution company Jacquet Metal Service has launched a further Schuldschein, according to sources. The market is gearing up for somewhat of a renaissance after a moribund 2020 and GlobalCapital understands that 10-15 more transactions are set to be launched in May.

  • Golden Energy wields high yield

    Golden Energy wields high yield

    Golden Energy and Resources drew in investors with an 8.875% yield on its bond on Thursday, allowing the mining company to raise $285m.

  • Chinese borrowers return to bond market

    Chinese borrowers return to bond market

    Three regular dollar bond issuers from China were the first out of the gates to tap investors on Thursday following a long holiday in the Mainland.

  • CLO managers look to fat triple-Bs to boost insurance appeal

    CLO managers look to fat triple-Bs to boost insurance appeal

    Investor appetite for triple-B CLO notes has been a powerful lever encouraging managers to tweak regular CLO structures to boost the size of this tranche and diverting excess spread to shore up the rating. Colloquially known as ‘Kroll deals’, from the rating agency that rates these issues, some managers have structured tranches as large as $100m to satisfy insurers’ quest for yield. But the structure relies in part on sourcing loans at low prices.

  • Swan song for hung bridges as Golden Goose readies bonds

    Swan song for hung bridges as Golden Goose readies bonds

    Golden Goose, the Italian shoemaker bought by Permira just before the coronavirus pandemic struck Europe, is looking for €470m of senior secured bonds in what may be the last repayment of a bridge facility signed before Covid. Hung bridges for leveraged buyouts were a serious concern for banks at the height of the pandemic but due to governments and central banks supporting the financial markets, lenders sold down the positions successfully — mostly much earlier than Golden Goose, writes Silas Brown.

  • Tullow tightens docs but gets rescue bond away

    Tullow tightens docs but gets rescue bond away

    Tullow Oil has tightened the already restrictive terms on a new $1.8bn senior secured bond, applying further limits to dividend capacity and restrictions on paying down its unsecured 2025 bonds early. But the company had few other options to stave off a restructuring, other than taking what the market will bear, and the bond looks set to price at the tight end of the 10.25%-10.5% guidance.

  • First UK SME CLO in the works after senior funding deal

    UK small business lender SME Capital could bring one of the first true SME CLO deals in Europe to market, once it builds up a large enough pool of collateral. The lender has just announced a funding deal with structured credit funds Prytania and Scio Capital, which will allow it to expand its lending capacity and build towards a full sized portfolio.

  • Allied bid backers to split $100m fees as G4S debt package lands

    Allied bid backers to split $100m fees as G4S debt package lands

    Banks backing the successful Allied Universal bid for UK security company G4S are set to split around $100m in financing fees for backing the deal, with Credit Suisse and Morgan Stanley in line for the lion’s share of the profits, as the $6.3bn eight tranche syndication is priced and the firm is delisted.

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