CLOs

  • CLO refinancing options examined

    Moody's notes in its latest CLO Interest publication that more refinancing options have become available for recent CLO 2.0 transactions. The agency says that the ability to refinance liabilities, either partially or in whole, is credit positive because refinancing enhances the available credit support and offsets the negative effects of loan re-pricings.

    As the non-call periods of most 2011-2012 vintage .......

    News Round-up 18 February 2014

  • GSO/Blackstone tops manager rankings

    Moody's top-10 CLO manager rankings in the US, Europe and globally have changed little since 2012, despite issuance in the US reaching a post-crisis high last year and issuance in Europe making a comeback. Ten new players entered the US CLO market in 2013, while Apollo expanded into the European market.

    In the US, 81 managers issued new CLOs in .......

    News Round-up 18 February 2014

  • Euro ramp-up risk overdone

    European CLO managers do not appear to have found it difficult to ramp up their portfolios, with most reaching their effective dates ahead of the anticipated time, S&P reports. The agency has analysed ramp-up activity in 2013, given that managers faced a dearth of new loans to use as collateral, introducing the risk of investment in lower-quality less diverse assets.

    News Round-up 18 February 2014

  • Vivarte exposure eyed

    French retailer Vivarte last week suspended payments on €2.8bn of buyout debt while it negotiates a restructuring. The move could cause some European CLOs to fail their coverage tests, resulting in a diversion of cashflows from junior to senior tranches.

    European securitisation analysts at Bank of America Merrill Lynch estimate that Vivarte accounts for around 2% of the underlying collateral .......

    News Round-up 18 February 2014

  • CLO issuance forecast revised

    JPMorgan has revised its downside forecast for US CLO issuance in 2014 to US$38bn, or 42% lower than its US$65bn base case, due to regulatory volatility. The bank's supply expectations for European CLOs remain at €10bn-€15bn, given the level of investor demand across the region.

    CDO strategists at the bank have also revised their end-2014 US CLO primary triple-A spread .......

    News Round-up 17 February 2014

  • CIFC hires for middle-market

    CIFC Asset Management has appointed Peter McLaughlin as md in New York to strengthen its middle-market offering. He joins from Longroad Asset Management, where he was head of originations, and has also worked at Gottex Middle Market Debt Fund, Contrarian Capital Management, GoldenTree Asset Management, Wells Fargo Foothill and JPMorgan.

    .......

    Job Swaps 17 February 2014

  • Euro CLO collateral evolves

    Last year saw 21 European CLOs price and several of those deals have now passed their effective dates. Compared to legacy deals, changes in collateral composition are already becoming apparent.

    Legacy European CLOs typically included a minimum requirement for the percentage of senior secured loans in the ramped-up portfolio, which has generally been replaced in 2.0 deals by a 90% .......

    News 14 February 2014

  • Best practices

    Noteholder communications, technology and clearing systems discussed

    Participants in SCI's latest corporate trust roundtable met in December to discuss post-closing best practices and noteholder communications. Technology and documentation challenges, as well as improvements to the clearing systems were among the topics covered. (The full SCI Corporate Trust Roundtable discussion can be downloaded here.)

    Corinne Smith, SCI: Investor concern over securitisation noteholder communications is increasing. I .......

    News Analysis 13 February 2014

  • LatAm trade finance CLO debuts

    IIG Trade Finance has completed an innovative securitisation of non-bank Latin America-based trade finance loans. Dubbed Trade Finance Funding I, the US$220m CLO was structured, arranged and placed by Deutsche Bank and will be managed by The International Investment Group.

    The transaction focuses on the Latin American agriculture and soft commodity industries, with the aim of creating a new source .......

    News Round-up 11 February 2014

  • Impatiently waiting

    CLO market seeking Volcker compliance

    US CLO volume totalled US$2.5bn last month, markedly down from the US$9.8bn reached in January 2013. Uncertainty about the Volcker Rule has contributed to this reduction in issuance, but it has also impacted the structure of the deals that have launched.

    Much of the confusion in the market derives from uncertainty about key Volcker Rule definitions, such as 'covered fund' .......

    News Analysis 11 February 2014

  • UK debt firms to combine

    Cabot Credit Management (CCM) has agreed to acquire Marlin Financial Group for £295m. The acquisition combines CCM's consumer debt expertise with Marlin's specialised debt buying capabilities.

    Combining the firms' core strengths, CCM and Marlin will expand their ability to grow revenues across a range of debt types. The combined company also expects to create further operational efficiencies by applying industry .......

    Job Swaps 10 February 2014

  • CLO non-loan assets reviewed

    In order to provide clarity on the extent to which CLOs hold non-loan assets, S&P has reviewed its rated US CLO portfolio to gauge their exposure to these assets. The agency examined 640 of the 705 CLO transactions outstanding as of year-end 2013. The remaining 65 deals were not effective or did not begin issuing their monthly reports by then.

    News Round-up 7 February 2014

  • Boutique credit manager formed

    MetWest Ventures has formed Aristotle Credit Partners to provide value-oriented credit investment strategies. The firm will focus on high yield bonds, high grade corporate credits and custom strategies.

    Aristotle Credit integrates an experienced high yield team with MetWest affiliate West Gate Horizons Advisors, which specialises in CLOs and bank loans. The senior investment team consists of Michael Hatley, Douglas Lopez, .......

    Job Swaps 6 February 2014

  • Regulators reconsider Volcker impact

    The US House Committee on Financial Services held a hearing yesterday on the potential ramifications of the Volcker Rule for the US economy and capital markets. Much of the discussion centred on CLOs and a working group has been formed to examine the impact of the rule on the sector.

    Representatives from the Fed, SEC, FDIC, CFTC and the OCC .......

    News 6 February 2014

  • CLOs shown to be 'robust'

    S&P says it has rated more than 1,100 US cashflow CLOs with an aggregate note balance of more than US$645bn since the mid-1990s. At year-end 2013, 705 of these CLOs remain outstanding, with an aggregate note balance of approximately US$293bn.

    The majority of the remainder have been paid in full and had their rating withdrawn. Only 25 tranches have defaulted .......

    News Round-up 3 February 2014

  • Positive outlook for LatAm securitisation

    Prospects for the Latin American structured finance markets in 2014 are good, according to S&P. In particular, the agency expects demand among Mexican issuers and Brazilian investors to create new opportunities for dynamic securitisation structures.

    A rebounding Mexican economy is likely to increase funding needs for local issuers, while an anticipated slowdown in the Brazilian economy may spur investor demand .......

    News Round-up 31 January 2014

  • CLO supply keeps coming

    It was another busy session in the CLO secondary market yesterday. Supply was dominated by 1.0 mezzanine paper, apparently boosted by the liquidation of one manager's CLO-squared.

    SCI's PriceABS data captured covers and price talk on 92 unique CLO tranches yesterday, with around two-thirds from the US and the rest from Europe. Vintages ran from several years pre-crisis .......

    Market Reports 30 January 2014

  • Buy-out triggers CMA assignment

    Certain employees of RidgeWorth Capital Management are set to acquire the firm and its wholly-owned boutiques from SunTrust Banks, in partnership with Lightyear Capital affiliates. The transaction is expected to close in 2Q14.

    No changes are currently planned to the Seix Investment Advisors investment team as a result of the move and the firm will continue to be wholly-owned by .......

    Job Swaps 28 January 2014

  • Euro CLOs facing headwinds

    Fitch expects issuance of European CLOs to continue in 2014, after €7.5bn of the securities - consisting of 21 transactions by larger established managers - was placed last year. Issuance will be a function of availability of loan collateral, managers' capital reserves to fund the retention stake and the clarification of the treatment of CLOs under the Volcker rule, according .......

    News Round-up 24 January 2014

  • Banks feel Volcker pinch

    Three community banks have disclosed negative tax impacts following the finalisation of the Volcker Rule.

    Cortland Bancorp, for one, has adjusted the carrying values of nine Trups CDO securities that are disallowed under the Volcker Rule to fair value through a non-cash other than temporary impairment (OTTI) charge to earnings for 2013. As of 30 September, the company reported in .......

    News Round-up 23 January 2014

  • More CLO 1.0 redemptions due

    Optional redemptions for CLO 1.0 deals - particularly 2005-2007 vintages - will continue this year, but there will be fewer for CLO 2.0 deals as investors instead turn to individual tranche refinancing features. Around 80% of 2005-vintage deals remain outstanding, as do more than 90% of deals from 2006 and 2007, notes Moody's.

    Last year the most heavily redeemed vintage .......

    News Round-up 22 January 2014
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