CLOs
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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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CLO refinancings to occur sooner?
US CLO deals refinanced so far this year have typically had only 12-15 months left in their reinvestment period, but Carlyle Investment Management earlier this month refinanced the entire debt of Carlyle Global Market Strategies CLO 2012-2 with two years left in the reinvestment period. Deutsche Bank CLO strategists suggest that the market is now moving into "interesting territory", where .......
News Round-up 21 July 2014
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BGLF placement exceeds expectations
Blackstone/GSO Loan Financing (BGLF) has raised gross proceeds of €260.5m via its share placement (SCI 14 July). Correspondingly, the total number shares in issue and of voting rights in the company following admission will be 260.5 million.
Charlotte Valeur, BGLF chairman, comments: "Investors have positively responded to Blackstone/GSO's presence and track record in the European loan market. The company will .......
Job Swaps 21 July 2014
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Credit vet moves on
Peter McLaughlin has joined mid-market specialist Medley Capital in New York. He joins from CIFC, where he was a capital markets md.
McLaughlin has more than two decades of loan origination, structuring, underwriting and investing experience in debt and equity markets. Before CIFC he was head of originations for Longroad Asset Management and also led loan origination at Gottex Fund .......
Job Swaps 16 July 2014
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Total return CLO index introduced
JPMorgan has launched the first rules-based daily observable pricing and total return index for US dollar-denominated broadly-syndicated arbitrage CLO debt. The Collateralized Loan Obligation Index (CLOIE) is intended to enhance transparency and act as a potential returns benchmark for the CLO sector.
The aggregate index contains 3,310 cusips from 679 CLOs, as of 30 June, representing US$236.1bn in par value .......
News Round-up 16 July 2014
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Accelerated evolution
Rapid pace of change as CLO market grows
US CLO issuance has reached record pace this year, as innovations driven by both regulatory demands and investor behaviour ensure that the product continues to develop. Deal sizes have grown, structures have evolved and new managers have tapped the market.
"When we came out of the financial crisis, the deals that jump-started the market and this continuous upward trend were .......
News Analysis 15 July 2014
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Japanese bank appoints CLO pro
Steve Kahn has joined the CLO team at Mizuho Securities as an executive director in New York. He was most recently president and executive officer at Invicta Financial.
Kahn was formerly at Babson Capital Management and served as group head for CDOs and CDS at Financial Security Assurance. He has also worked at Paine Webber and Ernst & Young.
....... Job Swaps 14 July 2014
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CLO origination vehicle planned
Blackstone/GSO is set to list a CLO origination vehicle - dubbed Blackstone/GSO Loan Financing (BGLF) - on the London Stock Exchange's Specialist Fund Market. The company will invest in a portfolio of assets comprising predominantly of European senior secured loans and CLO income notes issued by CLOs that are managed by Blackstone/GSO Debt Funds Management Europe.
Specifically, the new fund .......
News Round-up 14 July 2014
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Volcker changes bring benefits
CLOs which amend sooner than others may improve managers' relationships with key investors, make their debt and equity more attractive sooner and be more liquid in the broader market as the deadline for Volcker compliance approaches, says Fitch. However, amendments will be difficult in certain circumstances.
US banks currently hold around US$70bn of CLO debt that may eventually fall foul .......
News Round-up 9 July 2014
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Stable outlooks dominate APAC
Fitch affirmed 195 Asia-Pacific structured finance (SF) tranches in 2Q14. The agency also upgraded seven tranches and downgraded three others.
Of the total affirmations, 77 were from Australia, which also contributed five of the upgrades during the quarter. The upgrades were made to prime RMBS and unsecured consumer loan ABS bonds, where a build-up of credit enhancement supports the higher .......
News Round-up 8 July 2014
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Six European CLOs transferred
BNP Paribas Asset Management has replaced BNP Paribas as collateral manager on six CLOs. The affected deals are Leveraged Finance Europe Capital I, Leveraged Finance Europe Capital II, Leveraged Finance Europe Capital III, Leveraged Finance Europe Capital IV, Neptuno CLO I and Versailles CLO M.E. I.
Moody's says the move will not impact the CLOs' ratings but does not express .......
Job Swaps 8 July 2014
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Manager adds CLO pair
Apollo Capital Management has strengthened its team with two appointments. Albert Huntington and Matt Roesler will both be based in New York.
Huntington joins as principal. He was previously at Bank of America Merrill Lynch and Narricot Industries, while Roesler joins from Citigroup.
....... Job Swaps 7 July 2014
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Clean-up call candidates identified
The ECB's TLTRO operation entitles banks to initially borrow up to €400bn for four years at a fixed rate of 25bp. The availability of this low-cost funding increases the likelihood of originators exercising clean-up calls in European ABS and RMBS deals, according to Citi securitised product strategists.
Issuers generally have the right to call outstanding notes at par once the .......
News 4 July 2014
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'Core' arrangers dominate US CLOs
Underlining the flourishing market, 119 US CLOs priced in 1H14 for a total value of US$63.2bn, according to Appleby's latest 'CLO Insider' report. Volumes surpassed the total for 2H13 by US$22bn.
"The first half of 2014 not only marked the biggest dollar amount in terms of CLOs priced since the market started picking up in 2010, but the average deal .......
News Round-up 3 July 2014
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CLO lawyer becomes partner
Appleby has promoted Benjamin Woolf to partner. The structured finance specialist is a member of the corporate and commercial practice group.
Woolf has particular expertise in CLOs. Before joining Appleby in 2011 he worked at Clifford Chance and Mayer Brown, where he focussed mainly on securitisation and asset-backed financing.
....... Job Swaps 3 July 2014
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CLO credit quality stabilising
The credit quality of new and outstanding CLOs in both the US and Europe has stabilised, after deteriorating somewhat in 2013, according to Moody's. At the same time, rating upgrades have far outweighed downgrades, due to the rapid deleveraging of senior notes.
US transactions have benefitted from strong collateral coverage and adequate buffers for their quality-test covenants, allowing the quality .......
News Round-up 2 July 2014
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Steady secondary CLO supply
It was another fairly busy session for the US CLO secondary market yesterday. SCI's PriceABS data captured 26 unique US CLO tranches circulating on Tuesday, with paper from the top to the bottom of the capital stack achieving covers.
Deal vintages ranged from 2005 to 2014. Among the oldest paper out for the bid was the .......
Market Reports 2 July 2014
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Cov-lite exposure grows
US CLO 2.0 managers have not been fully using their cov-lite buckets, says Moody's. However, cov-lite holdings have grown as buckets have expanded since 2010 and cov-lites' share of the leveraged loan universe has also grown.
CLO managers appear to be using around half of their permitted cov-lite allowance. Cov-lite loan buckets typically constitute 50%-60% of portfolio par in recent .......
News Round-up 30 June 2014
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CLO manager diversity shrinking
There have been 34 deals issued from 19 managers since the European CLO market returned last year. Manager diversity has been shrinking, though, and only 22 managers are currently actively managing European CLOs.
Despite three new managers entering the market for the first time among those 19, manager consolidation - particularly between 2010 and 2012 - has shrunk the number .......
News 27 June 2014
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CLO PM appointed
Highbridge Principal Strategies has hired Jonathan Rabinowitz as a portfolio manager. He will report to portfolio manager David Frey and focus on broadly syndicated loans and CLOs.
Rabinowitz joins from Invesco Senior Secured Management. Before that he was at Morgan Stanley and has also worked for CIBC, Mizuho and Deloitte.
....... Job Swaps 27 June 2014
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CLO structuring head added
BNP Paribas has appointed Dushy Puvan as head of CLO origination and structuring. He will be based in London.
Puvan joins from Lloyds Bank, where he was a director focused on structuring CDOs and CLOs. He also has experience in ABS, leveraged loans, SME loans and corporate loans.
....... Job Swaps 25 June 2014