CLOs

  • CLO redemption risks examined

    An unusual EOD notice has been issued for the Integral Funding CLO, after a scheduled optional redemption failed to complete on 15 April because of delays in the settlement of collateral sales. Although noteholders' risk of loss has not increased materially as a result, the experience highlights the small but non-trivial risk to CLO investors of relying on trustees' and .......

    News 8 May 2013

  • Euro SME deals remain 'uneconomic'

    The market for European SME securitisations remains shut, despite significant spread contraction, Fitch reports. The agency notes that this is mainly because securitisations of loans to SMEs, if placed with investors, are uneconomic from the lenders' perspective.

    "The prevailing view is that SME securitisation - due to the lack of liquidity in the market, as well as the perceived additional .......

    News Round-up 7 May 2013

  • CLO pricing service offered

    Markit has launched a new pricing service for CLO tranches. The service covers more than 5,000 investment grade tranches of US and European CLOs and is expected to be used for price discovery, price verification, valuation and risk management.

    The service uses observable market data and best-in-class models to value CLOs. Markit will provide customers with detailed information on data .......

    News Round-up 3 May 2013

  • Stepping up

    First-time CLO managers' to-do list discussed

    As the US CLO sector continues to recover, more players are expected to enter the market. Prospective first-time managers may not be aware of the extent of the additional documentation and management burden, however, compared to managing a private equity or hedge fund.

    The first step for any private equity fund or hedge fund seeking to issue their debut US .......

    News Analysis 30 April 2013

  • Rating stability forecast for Euro CLOs

    Fitch expects European leveraged loan CLOs to maintain rating stability throughout the rest of 2013. The agency recently reviewed its 27 rated European leveraged loan CLOs, with all but two transactions being affirmed.

    Fitch's April 2013 European Leveraged Loan CLO Tracker Excel file reveals that the triple-C and below bucket has remained stable at 9.2% since October 2012. There have .......

    News Round-up 26 April 2013

  • Refinanced CLO notes syndicated

    The triple-A, single-A and triple-B rated tranches of the 2011-vintage OHA Intrepid Leveraged Loan Fund were refinanced last week. Unlike other recent CLO refinancings (SCI 8 March), the Oak Hill Advisors deal refinancing was syndicated (via Morgan Stanley).

    The new coupons on the class A, C and D tranches are 92bp, 200bp and 305bp over Libor, down from 150bp, 230bp .......

    News Round-up 23 April 2013

  • Asset sourcing, risk retention key for Euro CLOs

    The ability to source loans and retain risk will be key for CLO managers launching new European CLOs, Fitch says. The cost of funding for European CLOs has reduced to a point where CLO economics are once again starting to look viable for new issuance. At the same time, CLOs are becoming more appealing to credit investors searching for higher .......

    News Round-up 23 April 2013

  • Manager brings in CLO investment adviser

    Greenwich Loan Income Fund (GLIF) has appointed GMB Partners as an investment adviser. GMB will advise GLIF on the investments it makes into the CLO market, on the structuring of new CLO investments and on a number of its existing CLO investments.

    GMB was founded last year by Miguel Ramos Fuentenebro, who has more than 20 years of experience in .......

    Job Swaps 22 April 2013

  • Erroneous WARF computations corrected

    Moody's has finalised its review of all outstanding European CLO transactions for potential ratings impact relating to weighted average rating factor (WARF) differences resulting from the incorrect use of an alternative approach for computing WARF. The agency has identified 21 transactions that could have been impacted by the erroneous use of the alternative WARF computation.

    Under Moody's published global CLO .......

    News Round-up 22 April 2013

  • Volume boosted by pulling CLOs forward

    US CLO new issuance increased nearly five-fold in Q1 compared to the same period in 2012, though issuance is likely to level off as the year progresses, Fitch says. First quarter volumes stand at over US$26bn (compared to US$6bn in 1Q12), with the general consensus being that they will finish the year in the US$55bn-US$75bn range.

    Much of the first .......

    News Round-up 19 April 2013

  • FDIC rules impacting CLO demand

    It has been a relatively slow start to the second quarter for the primary US CLO market on the back of recent high volumes and the FDIC regulation taking effect at the beginning of April. But the month has so far been noteworthy for the debut issuances from two new managers and some interesting spread movements lower down the capital .......

    News Round-up 18 April 2013

  • Euro CLO equity returns examined

    The average European CLO equity cashflow return recovered to 10.5% in 2012 from 8.5% in 2011, according to JPMorgan. However, significant dispersion remains: strong equity returned 15%-20% last year, but up to a quarter of the market returned 0% due to widespread OC failure.

    By way of comparison, the average US CLO equity return was 26.8% last year. Reasons for .......

    News Round-up 17 April 2013

  • Macro weakness skews rating transitions

    By end-2012, only 1.37% by original issuance volume of European structured finance notes outstanding in mid-2007 had defaulted, according to S&P's latest quarterly ratings transition study.

    "Consumer-related securitisations in particular have seen solid credit performance through the crisis, with a cumulative default rate since mid-2007 of only 0.04%," confirms S&P credit analyst Arnaud Checconi. "In addition, we estimate that more .......

    News Round-up 16 April 2013

  • Apollo Euro CLO prints

    Apollo Global Management has priced ALME Loan Funding 2013-1, its €334m debut European CLO. The transaction was upsized from €307m.

    Arranged by Citi, the deal's capital structure comprises seven tranches: €195m class A1 notes; €27m A2s; €27m Bs; €15.2m Cs; €11.9m Ds; €13m Es; and €45.5m subordinated notes. Moody's has assigned Aaa ratings to the class A1 notes and S&P .......

    News Round-up 15 April 2013

  • Upgrade potential for CLO constituents

    S&P has incorporated the top 250 corporate obligations held in rated US cashflow CLOs in its potential bond upgrade research this month. The agency found that 23 of these companies have upgrade potential, constituting 17% of the 138 US-based potential upgrades. The telecommunications and consumer products sectors have the highest concentration of potential upgrade CLO constituents, with 22% and 13% .......

    News Round-up 12 April 2013

  • Gleacher shuts down RMBS group

    After spending the second half of 2012 repeatedly strengthening its MBS and rates division (SCI passim), Gleacher & Company has closed down both that business and its credit products business. Exiting those businesses and engaging in a wider restructuring are expected to impact around 160 employees.

    Gleacher's other businesses, such as investment banking, are unaffected. The company has also announced .......

    Job Swaps 11 April 2013

  • Loan mapping tool unveiled

    Codean has released Codean Open Loan Mapping (Codean OLM), an open database of leveraged loans - including industries, spreads, maturities and alternative obligor names - for held by CLOs. Free registration provides access to all data, except for CLO holding information, which is available to paid subscribers.

    Peter Jasko, Codean md, comments: "Loans often trade under a variety of names .......

    News Round-up 10 April 2013

  • Bank names structured products vet EMEA ceo

    Nomura has named Jeremy Bennett as ceo for EMEA. Scott Bugie has also been made head of the financial institutions group's ratings advisory division for the region.

    Bennett has held non-executive director positions within Nomura's European businesses since 2010. His background is in structured products and derivatives and previous roles include global head of structuring at Credit Suisse and head .......

    Job Swaps 10 April 2013

  • Palmer Square boosts credit capabilities

    Jeffrey Fox has joined Palmer Square Capital Management from Sandler O'Neill, where he was md responsible for structuring and selling CLOs. He becomes executive director and takes on key responsibilities for Palmer Square's structured credit and CLO platform.

    Prior to Sandler O'Neill, Fox was at Société Générale, where he was part of the US CDO, CLO and RMBS credit advisory .......

    Job Swaps 10 April 2013

  • BoJ boost for CLOs, MBS

    The stronger-than-expected quantitative easing announced last week by the Bank of Japan is likely to boost the US securitisation market. Of the US$200bn in incremental demand that the BoJ has signalled, over half is forecast to spill into US fixed income over the course of the year, with CLOs and MBS in particular anticipated to benefit.

    Several Japanese banks have .......

    News Round-up 9 April 2013

  • Primary issuance hotly anticipated

    With the European secondary markets subdued in the wake of Easter holidays, focus has turned to the CLO space. A few ABS bid-lists have kept the market ticking over and have been well received, but it is the anticipated forthcoming CLO primary issuance that is really garnering attention.

    The €306.5m ALME Loan Funding 2013-1 and the €300m Dryden CLO XXVII .......

    Market Reports 9 April 2013
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