CLOs

  • CLO reset run hits final straight before decline

    CLO reset run hits final straight before decline

    CLO refi and reset activity has departed from its usual forms, with some managers resetting a single deal in a limited time frame, while others take the opportunity to switch tranches from fixed to floating, or focus refi efforts on a limited number of tranches. Managers don't want to lose the opportunity presented by current market conditions to save costs, and are seeking different solutions to optimise their structures.

  • 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.

  • 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.

  • 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.

  • 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.

  • Canyon resets and increases its Covid-era deal

    Canyon resets and increases its Covid-era deal

    Covid-era deals looking for cheaper liability stacks are beginning to flood the market with refi and reset transactions, as they hit the end of their one year non-calls. Canyon Capital has reset and increased the size of Canyon CLO 2020-1, cutting 74bp off the margin of a senior tranche originally priced in May 2020.

  • Centerbridge joins growing ranks of hybrid CLO managers

    Centerbridge joins growing ranks of hybrid CLO managers

    More managers are eyeing the rare US CLO structure which combines both leveraged loans and high yield bonds, in search of more flexibility, and to capitalize on the mispricing between the high yield and leveraged loan markets.