CLOs

  • Fund settles over fair value charge

    The US SEC has charged three executives at KCAP Financial for overstating its assets during the financial crisis. KCAP, a publically traded fund regulated as a BDC, had an asset portfolio consisting mainly of corporate debt securities and CLO investments.

    The SEC says KCAP did not account for certain market activity in determining the fair value of its debt securities .......

    Job Swaps 29 November 2012

  • Loan-level reporting timelines lengthened

    The ECB has adjusted its timeline for the start of loan-level data reporting requirements as part of the Eurosystem's collateral framework, to allow for the smooth implementation of what it deems as necessary amendments to Guideline ECB/2011/14 at the national level.

    For RMBS and SME transactions, the reporting requirements will now be mandatory as of 3 January 2013. For CMBS, .......

    News Round-up 27 November 2012

  • Cov-lite comeback analysed

    US covenant-lite loans have made a significant comeback in the leveraged finance market, reflecting investor willingness to take on more risk in exchange for higher yields, according to Fitch. Cov-lite loan issuance totals US$49bn year-to-date.

    Cov-lite issuance represented 31% of institutional loan issuance in October alone, the highest percentage since the end of the financial crisis. The growth of both .......

    News Round-up 27 November 2012

  • OAT-linked deals downgraded

    Moody's has downgraded the ratings of three structured finance securities that are linked to France's government bond rating. At the same time, the agency placed on review for downgrade the ratings of 12 CLO combination notes with a partial exposure to French treasuries.

    The rating action was prompted by the weakening of the French government's credit profile, as captured by .......

    News Round-up 26 November 2012

  • New CLO managers reviewed

    Moody's reports in its latest CLO Interest publication that it has assigned ratings to nine CLOs from eight new managers year-to-date through 30 September. CLOs from new managers accounted for over 10% of the deals it rated during this period.

    "This level of new manager activity is the highest since the flurry of new entries into the CLO management business .......

    News Round-up 23 November 2012

  • Ex-Citi CDO structurer hired

    StormHarbour Securities has hired Brian Stoker as md in New York. He will be responsible for CLO structuring and fixed income sales.

    Stoker has previously served as financial and business services group head at HBS Angel Investing Club, research analyst at Carson Capital and vp at Merrill Lynch, where he structured CLOs and traded RMBS, ABS and CDOs. He also .......

    Job Swaps 21 November 2012

  • CLO maturity wall reducing

    Codean has updated its study of the maturity profile of leveraged loans held by US and European CLOs for 3Q12. The report finds that the 2014 maturity wall has been significantly reduced, with considerable effort over the last six months to reduce the size of these maturities (SCI 26 October).

    The share of US loans maturing in 2014 has dropped .......

    News Round-up 19 November 2012

  • Euro CLOs stress tested

    Fitch-rated European triple-A CLO tranches can withstand significant stress driven by the knock-on effects of lowly rated cyclical corporates struggling to refinance debt as it comes due, the agency notes.

    Cyclical credits have lower free cashflow than their counterparts in other sectors and, as such, are more likely to default or go to their lenders seeking maturity extensions in return .......

    News Round-up 19 November 2012

  • European investor relations head joins

    3i Debt Management has appointed Melissa Tessier as director. She will focus on investor relations in Europe, having held similar roles at Bank of America Merrill Lynch and AXA Investment Managers.

    Tessier will report to Andrew Bellis, who joined the firm as partner in the summer (SCI 14 June). She was most recently senior director at Cantor Fitzgerald, where she .......

    Job Swaps 19 November 2012

  • Libor floor benefits examined

    Libor floors have provided a boost to the interest payments paid by loans held within US CLO transactions, S&P says. This, in turn, has driven payouts to equity significantly higher.

    CLO interest coverage ratios have risen along with the steady decrease in Libor rates, as the amount of interest due on the CLO liabilities decreases at a faster rate than .......

    News Round-up 14 November 2012

  • Loan rating service launched

    Moody's has launched a new rating service for the US loan market, with the introduction of unpublished monitored loan ratings (UMLRs). The product has been developed in response to a growing market need for access to detailed credit analysis, the agency says.

    "The UMLR product provides a definitive analysis that is identical to published ratings, thereby delivering - upon the .......

    News Round-up 13 November 2012

  • UK debt firm acquired

    Greenwich Loan Income Fund has entered into an asset sale and purchase agreement with BMS Specialist Debt Fund. Greenwich will purchase certain BMS assets for £11.6m in ordinary shares.

    BMS will continue to be managed by Ewan Stradling, Martin Ling and credit expert Shane Lanigan, who previously worked at Elgin Capital trading leveraged loans for the Dalradian European CLO series .......

    Job Swaps 8 November 2012

  • Secondary CLO activity rises

    The secondary markets were very active yesterday, with noticeably more CLO paper circulating than normal. SCI's PriceABS BWIC data shows 115 CLO line items, with notes from the bottom of the capital structure showing more liquidity.

    Tuesday's session saw a mix of US and European paper. One of the highest covers, at 89.09, was for CENT9 2005-9X D1. The tranche .......

    Market Reports 7 November 2012

  • Alpstar CLO transfers mooted

    Chenavari Investment Managers is set to replace Alpstar Management as collateral manager on the Alpstar CLO 1 and 2 transactions. Consent of controlling noteholders via a written resolution is required by 12 November for this to occur.

    If approved, Chenavari will designate Loïc Fery and Mick Vasilache as replacement key persons pursuant to the collateral management agreement. Fery is the .......

    Job Swaps 5 November 2012

  • SME CLO duo called

    The early termination of two German SME CLOs has been announced.

    2012S-Fix 1 was called last month by LBBW due to a change in transaction economics, following the bank's recent downgrade. The liquidation became effective on 30 October.

    Meanwhile, KfW is set to exercise a clean-up call for Promise XXS-2006-1, which will become effective on 12 November.

    .......

    News Round-up 2 November 2012

  • Euro CLO market on pause

    Activity in the secondary European CLO market stalled this week as first the US and later Europe all but shut down. Several lists planned for the end of October could now be hitting the market next week instead.

    "It has been a strange week. The beginning of the week was the slowest we have seen because of the US and .......

    Market Reports 2 November 2012

  • Great expectations

    Shifting CLO assumptions amid strong performance

    US CLO tranches tightened across the board in the third quarter, with primary issuance and secondary activity both exceeding expectations. Positive sentiment is prompting more aggressive assumptions from investors, based on expectations of continued strong performance.

    Third-quarter issuance surpassed post-crisis highs, and issuance for 2012 as a whole is expected to be the highest since 2007. One of the contributing .......

    News Analysis 2 November 2012

  • Compare and contrast

    Cross-sector relative value key for yield

    With QE3 driving down interest rates and spreads rallying to near-term tights, investors are being forced to work harder to find yield. The right portfolio composition is vital in this process, which is driving more investors to look at cross-sector relative value.

    "Investors are being forced to look at asset classes where they may not have traditionally invested. That is .......

    News Analysis 1 November 2012

  • Evolving CLO appetite observed

    The CLO investor base continues to evolve, with diversification seen across real money, banks and hedge funds. A recent JPMorgan analysis confirms that investor interest in the asset class is increasing post-QE3 and ECB actions, as tail risks decline and risk premia are squeezed across spread product.

    In terms of investor type observed in secondary US CLO BWIC activity, real .......

    News 31 October 2012

  • TFG makes affiliate acquisition

    Tetragon Financial Group has acquired Polygon Management's asset management business and its interests in LCM Asset Management and GreenOak Real Estate. The acquisition is part of Tetragon's ongoing strategy to expand its asset management platform.

    The Polygon acquisition includes the London and New York asset management businesses and infrastructure platform as well as Polygon's 25% stake in LCM and 13% .......

    Job Swaps 30 October 2012

  • A-to-E success highlighted

    An estimated US$67bn of CLO amend-to-extends (A-to-Es) were completed by end-3Q12 in the US, compared to US$53bn during all of 2011. Such activity has helped push the bulk of loan maturities out into 2017 and 2018.

    Bank of America Merrill Lynch figures put the amount of loans coming due in 2013 and 2014 as US$10bn and US$56bn respectively, down significantly .......

    News Round-up 26 October 2012
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