CLOs

  • Additional issuance for Euro CLO 2.0

    Dryden XXVII Euro CLO 2013 subordinated noteholders have approved the creation and issuance of additional notes via a written resolution, at the request of the issuer. The move follows the replacement of PIM Foreign Investments as risk retention holder on the transaction with the collateral manager Pramerica Investment Management.

    The issuer notified noteholders on 13 August that it wishes to .......

    News Round-up 19 August 2014

  • SNC enforcements could have mixed impact

    The US Fed, the OCC and the FDIC have warned that banks found to have unsound practices - based on leveraged lending guidance released in 2013 - could be subject to enforcement actions. Such actions would have a mixed impact on CLO investors, Moody's suggests.

    Enforcement actions could follow the regulators' annual Shared National Credit (SNC) review of syndicated loans, .......

    News Round-up 13 August 2014

  • CLO firm adds RBS pair

    CIFC Corp has boosted its capital markets and distribution group with the appointments of Matt Andrews as md and Mark Sanofsky as executive director. They both join from RBS Securities.

    Andrews was head of CLO origination and structuring for RBS' CLO business and had previously worked in RBS' asset-backed finance group. Sanofsky was a senior member of RBS' US CLO .......

    Job Swaps 13 August 2014

  • Positive CLO rating trend continues

    Around 85% of rating changes for European CLOs so far this year have been upgrades. The positive rating trend has been in force since 2011 and means that many tranches are now at or close to their original ratings once more, particularly at the top of the capital structure.

    From a list of 180 outstanding legacy European CLOs, Bank of .......

    News 12 August 2014

  • Refi activity set to continue

    The average US CLO triple-A spread for transactions rated in July 2014 was 1.51%, similar to the average triple-A spread for 2012 vintage transactions that are currently exiting their non-call periods, according to S&P. The agency notes that although current triple-A spreads would appear to limit opportunities for refinancing, it has received a steady stream of such requests, even just .......

    News Round-up 11 August 2014

  • Origination activity mooted

    Recent developments in the market may potentially allow Fair Oaks Income Fund (or vehicles seeded by it) to act as originator of European CLOs managed by unaffiliated managers, in line with the active investment approach described in its prospectus, the company says. As originator, the master fund or its affiliates could hold the risk retention investment required by current regulations .......

    Job Swaps 11 August 2014

  • Recovery values to benefit equity

    S&P's incorporation of loan recoveries into its analysis of CLOs (SCI 4 August) is expected to have a broadly positive impact on the sector. In particular, Wells Fargo CLO analysts suggest that the changes should benefit equity investors, if managers are able to add higher spread assets to their portfolios.

    "It appears that after this update, each CLO asset's assigned .......

    News Round-up 7 August 2014

  • Credit benefits

    Reach for yield outweighs macroeconomic concerns

    The US credit markets enjoyed a positive first half, with some sectors seeing returns in the high single-digits due to consistent spread tightening and rate compression. The strongest performing segments were those with exposure to interest rate duration.

    "Credit has benefited from several helpful trends: accommodative central bank policy, low default rates and benign treasury rates," confirms Chris Acito, ceo .......

    News Analysis 5 August 2014

  • Loan recoveries to support ratings

    S&P is incorporating additional information on loan recoveries into its analysis of CLO transactions. The new information aims to provide additional insight into the agency's view of potential recovery outcomes within the bands associated with certain of its recovery rating categories.

    The initial report providing additional guidance on recoveries for approximately 80 loans was published on 18 July, but the .......

    News Round-up 4 August 2014

  • Methodology guidelines finalised

    Scope Ratings has finalised its methodology guidelines for rating and monitoring structured finance instruments, taking into account market comments and other feedback following the publication of a draft proposal. These guidelines provide the general framework for the development of in-depth methodologies. Scope plans to issue subsequent addenda to these guidelines in order to define its specific assumptions for rating structured .......

    News Round-up 31 July 2014

  • Strong secondary CLO supply

    The US CLO secondary market was busy yesterday, with SCI's PriceABS data capturing 62 unique US CLO tranches on bid-lists. Paper from the length of the capital stack was out for the bid and various vintages were represented.

    One of the more recently issued tranches was AMMC 2014-14A A1L, which was appearing in PriceABS for the first time. .......

    Market Reports 30 July 2014

  • CLO issuance hits highs

    US CLO new issuance finished 1H14 with the most active quarter since the inception of the market, Fitch reports. The agency notes that 65 deals totalling nearly US$37bn came to the market in 2Q14, bringing the total to 105 CLOs for US$57.6bn for the first half of the year. Additionally, US$2bn across four middle market CLOs was issued in the .......

    News Round-up 30 July 2014

  • Cov-light activity highlighted

    Fitch expects the recent trend for larger covenant-lite buckets in European CLOs to continue, although it may be tempered by investor requests for rating constraints on their inclusion. Limited data make it hard to say conclusively that cov-lite loans are riskier than traditional leveraged loans, but limiting a manager's flexibility to invest in lower quality cov-lite loans could support transaction .......

    News Round-up 30 July 2014

  • European alternative

    Stefan Bund, group md and head of asset-based finance at Scope Ratings, answers SCI's questions

    Q: How and when did Scope Ratings become involved in the securitisation market?
    A: Scope Ratings was established in 2002 as a funds analysis house, specialising in the commercial real estate, SME and infrastructure sectors. The company expanded into the credit rating business in 2012 by merging with a smaller German rating agency.

    Scope's move was .......

    Provider Profile 29 July 2014

  • Napier Park completes Citi redemption

    Napier Park Global Capital has returned to Citigroup the last of the capital that had been invested in its hedge funds. The staggered US$2.4bn redemption schedule began in March 2013, when Napier Park completed its spin-out from Citi and became majority owned by its employees (SCI passim). As a result, Citi is no longer an investor in any of Napier .......

    Job Swaps 25 July 2014

  • Loan TRS 'welcome' addition

    Total return swaps (TRS) on investment grade and high yield credit indices in Europe and the US have seen moderate success over the past two years. However, the recent extension of Markit's suite of TRS to include leveraged loans is expected to garner more attention - both in terms of addressing loan market hedging demand and helping CLO managers and .......

    News 23 July 2014

  • HARBM 3 hit by lack of credit support

    The Harbourmaster CLO 3 class B tranche last week defaulted at the deal's legal final maturity. The transaction differed in several ways from typical legacy European CLOs, but appears to have primarily succumbed to a lack of credit enhancement.

    The HARBM 3 class A notes repaid in full, the B1 and B2 notes were redeemed to 51.5% and 52% of .......

    News 23 July 2014

  • Second-lien loans gain favour

    US CLO managers are divesting bonds in their portfolios in anticipation of rising interest rates and to realise gains. Moody's says that the replacement of some bond holdings with second-lien loans is credit neutral because both asset types are expected to have similar recovery rates.

    "Capital structure position and collateral value are the primary determinants of recovery rates," the agency .......

    News Round-up 22 July 2014

  • Warehousing facilities weighed

    The entrance of new and varied types of equity investors in the CLO market willing to contribute a first-loss piece during the warehousing phase has made it easier for CLO managers to access warehouse financing. However, different warehouse structures have their own unique credit risks, Moody's notes in its latest CLO Interest publication.

    "The vast majority of broadly syndicated CLOs .......

    News Round-up 22 July 2014

  • Little change for CLO manager rankings

    Moody's rankings of the top-10 CLO managers in the US, Europe and globally have changed little since December 2013, but their share of the US CLO market has slipped to 29% from 33% during the period. First-half issuance reached US$45bn in the US and €4.6bn in Europe, with strong issuance offsetting redemptions in the former region resulting in a net .......

    News Round-up 22 July 2014

  • Volckerised Euro CLO structured

    3i Debt Management last month priced Harvest CLO IX, the first European CLO to comply with the Volcker Rule by excluding non-loan investments. Doing so opens the transaction up to banking entity investors who the Volcker Rule will prohibit from holding the CLO notes once it goes into effect next year, Moody's notes in its latest CLO Interest publication.

    "By .......

    News Round-up 22 July 2014
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