CLOs

  • Equity gap

    CLO equity approaches diverging

    A two-tier system is emerging within US CLO equity as large investors competitively expand their mandate while smaller players move out of the market. This emerging gap is also manifested in a wave of manager consolidation, as risk retention remains a dominant concern.

    "BDCs are providing the most interesting story in the equity market right now," says Oliver Wriedt, co-president .......

    News 10 September 2015

  • TICC terms revised

    TICC Capital has revised the terms over its agreed acquisition by Benefit Street Partners (BSP). The revisions include a permanent annual base management fee reduction to 1.5% from 2%, as well as a commitment by various members and affiliates of BSP and TICC Management to purchase a minimum of US$20m of TICC's common stock within twelve months following entry into the agreement.

    Job Swaps 7 September 2015

  • Euro secondary ticks up

    Broader market improvement on the back of the message from the ECB and the Chinese holiday has extended into the European securitisation secondary market with a slight uptick in activity and some improvement in pricing levels.

    Flows continued to revolve around the usual suspects with sterling-denominated prime and peripherals, especially Italy, benefitting the most. At the same time, the CLOs .......

    SCIWire 4 September 2015

  • CLO commodity exposure 'negative'

    US CLO 2.0s' exposure to oil and gas and to metals and mining increased slightly in 1H15, which is a credit negative according to Moody's. With commodity market stresses moving into the credit market, CLOs with the largest exposures could suffer credit losses on their junior notes should there be widespread and correlated distress among related issuers.

    Of the CLO 2.0s .......

    News Round-up 3 September 2015

  • Euro secondary still slow

    Despite hopes for a post-August spike, volumes in the European securitisation secondary market are still only growing slowly.

    "It's still pretty quiet and could take a while to really get going," says one trader. "This week has been slower than we hoped as broader market volatility continues and people are also waiting on the ECB today and the growing primary schedule .......

    SCIWire 3 September 2015

  • US CLOs becalmed

    A late Labor Day combined with continuing broader market volatility has becalmed the US CLO secondary market.

    "We're in a holding pattern and it's really, really quiet," says one trader. "It's not unsurprising given the position of Labor Day this year - even though we're in September this is effectively the last week of summer."

    Consequently, the trader adds: "I .......

    SCIWire 2 September 2015

  • CLO slice financing considered

    Although the US CLO market has now surpassed its pre-crisis size, the number of managers issuing CLOs has decreased. With risk retention set to cull numbers further, vertical slice financing could provide managers with a solution.

    There were 181 CLO managers issuing before the crisis, but only 126 post-crisis. A Citi survey suggests risk retention rules will mean only 80-100 managers .......

    News 2 September 2015

  • CLO negative returns persist

    The total amount of CLOs paid down in JPMorgan's CLO index (CLOIE) since the July rebalance through 31 August was US$5.88bn in par outstanding, split between US$4.04bn and US$1.84bn of pre-crisis and post-crisis CLOs. The post-crisis CLOIE added US$10.8bn, with 135 tranches from 26 deals at the August rebalance.

    The CLOIE total index experienced negative returns in the month of .......

    News Round-up 2 September 2015

  • Euro CLOs seek clarity

    The European CLO secondary market is seeking clarity on pricing levels following a very quiet summer.

    "It's been very quiet - the bulk of activity in August was in triple- and double-A 2.0s, with very little in 1.0s, and there's been next to nothing so far this week," says one trader. "So, it's very difficult to tell where clearing levels .......

    SCIWire 2 September 2015

  • CLO drilling exposure weighed

    Moody's has placed 11 offshore drilling companies under review for downgrade, five of which have loans held in outstanding US CLOs. Wells Fargo structured products analysts suggest that the potential downgrades present key, yet difficult to model, risks to CLO investors.

    The five companies with exposures in CLOs are: Transocean; Seadrill Partners; Ocean Rig; Paragon Offshore; and Pacific Drillings. A total of 445 CLO funds have .......

    News 1 September 2015

  • CLO 1.0 potential scouted

    The US CLO 1.0 market may now be well onto the home straight, but that does not mean there is not still value to be found. Illiquidity is a risk and certain plays depend on the timing of when deals are called, but investors able to handle these factors can still generate alpha.

    JPMorgan analysts estimate there is still US$80.6bn .......

    News 1 September 2015

  • US CLO shift

    The US CLO secondary market is still refusing to completely give in to the summer doldrums and today sees BWIC supply shift up the capital stack albeit with low volumes persisting.

    Yesterday's flurry of mezz paper on BWIC traded reasonably well although there were a relatively high proportion of DNTs. Today sees sellers focusing on senior tranches with only two fairly .......

    SCIWire 28 August 2015

  • Euro secondary lacks conviction

    Despite an improving overall tone, the European securitisation secondary market continues to lack conviction.

    Even though broader market concerns are shelved for now yesterday was extremely quiet thanks to month-end and the summer lull. What small pockets of activity there were revolved around short-dated prime assets, some peripheral paper and a few major CMBS names.

    With a UK bank holiday .......

    SCIWire 28 August 2015

  • US CLO flurry

    Today is set to see a flurry of activity in the US CLO secondary market after an extremely quiet few days, but it could be the last gasp of the summer.

    "It's been very quiet, but we saw a seller bring out a buy-it-now list yesterday, which attracted some interest," says one trader. "However, only one line traded straight away .......

    SCIWire 27 August 2015

  • Euro secondary improves

    Tone in the European securitisation secondary market is improving as broader market volatility reduces.

    Market sentiment improved across the board yesterday and consequently secondary spreads edged in slightly, albeit on continuing very low volumes. Yesterday's BWICs all traded at or above expectations with the Italian RMBS auction a highlight, though covers were below recent levels.

    Nevertheless, the summer lull is .......

    SCIWire 27 August 2015

  • Reinvestment extensions to pick up?

    A total of 24 US CLOs have been refinanced so far this year (see SCI's new issuance database), representing a tranche balance of over US$9bn, according to Bank of America Merrill Lynch figures. Among the more recent refinancings, three took the unusual step of increasing the triple-A coupon spreads in return for substantially extending the reinvestment period.

    The .......

    News 26 August 2015

  • CLO redemption waiver requested

    A recent investor notice for Gresham Capital CLO III requests that the trustee of the deal waive a rating requirement with regards to its optional redemption terms. The deadline for objections from the controlling class of noteholders (class B) is 17 September.

    Bank of America Merrill Lynch securitisation analysts explain that an optional redemption may occur when the issuer can certifity to .......

    News Round-up 26 August 2015

  • Euro secondary struggles on

    The European securitisation secondary market continues to struggle on amid broader market volatility.

    Yesterday's European BWICs covered at reasonably strong levels where the line items did actually trade. However, the overall lack of flows continues to hamper price transparency and is pushing bid-offers still wider.

    Today's BWIC schedule currently sees four lists. At 10:00 London time is a seven line .......

    SCIWire 26 August 2015

  • US secondary slowdown

    US BWIC supply has slowed to a trickle today across asset classes.

    Events in China and the feared knock on impact on the US Fed's rate strategy look to have sidelined the bulk of US securitisation secondary market participants. The resultant absence of sellers is making for a quiet looking day across asset classes even for the fourth week of .......

    SCIWire 25 August 2015

  • CLO equity acquired

    Fair Oaks Income Fund has entered into binding contracts to acquire in the primary market US$28m notional of equity notes (representing 73% of the total equity) and US$8.6m notional of class F notes of Shackleton 2015-VIII CLO. Managed by Alcentra, the CLO's current target portfolio has a principal value of US$430m across an expected 156 unique bank loan issuers, with .......

    Job Swaps 25 August 2015

  • Euro secondary holds up

    In the face of continuing equity market volatility the European securitisation secondary market appears to be holding up relatively well.

    True price discovery remains very difficult with almost no trading thanks to the summer lull combined with the extreme equity and FX market volatility discouraging any securitisation market participants still at their desks. However, dealers for now appear to be taking .......

    SCIWire 25 August 2015
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