CLOs

  • German SME CLO defaults dropping

    The fall in German corporate insolvencies in 2015 will help stabilise German SME CLO deals, says Fitch. The transactions will mostly benefit from a knock-on reduction in default rates, which are already declining.

    Germany's Federal Statistical Office said last week that the country's local courts had reported 23,123 business insolvencies in 2015, which was down 4% on the previous year and at the lowest .......

    News Round-up 17 March 2016

  • Mixed approaches to Valeant risk

    Valeant, the single biggest obligor in US 2.0 CLOs, continues to generate negative headlines. However, CLO managers appear to be divided on Valeant risk.

    Valeant has missed its 4Q15 forecasts and offered a bleaker forward outlook than the market expected. It has also sought to waive the cross default provision related to the delayed filing of its annual 10-K.

    Moody's .......

    News 17 March 2016

  • Euro secondary partly pauses

    The bulk of the European securitisation secondary market took a pause yesterday, but CLOs continue to outperform.

    "Yesterday was a bit quieter after the pick-up in activity that followed the ECB last week and into the start of this," says one trader. "BWICs have been the main focus but supply dropped as many people used the excuse of the FOMC .......

    SCIWire 17 March 2016

  • Euro secondary mixed

    The European securitisation secondary market is seeing mixed activity and results as the wider credit rally runs out of steam.

    "Overall, the secondary market continues to normalise, but it is highly sector-dependant," says one trader. "Yesterday was active, but that was mainly off the back of BWICs, while customer flows were slower thanks to softening in wider credit."

    Those BWICs yielded mixed .......

    SCIWire 16 March 2016

  • US CLO shift

    The tone in the US CLO secondary market continues to shift in a positive direction, but it will be tested today.

    "The past two weeks have seen a shift in tone and mezz has kept rallying versus where we were in January and February," says one trader. "That tone has been helped by stability in global markets, but the recent .......

    SCIWire 15 March 2016

  • ECB suggests regulatory tweaks

    The ECB has suggested changes to the new securitisation package proposed by the European Commission and adopted by the European Council in December. The package contains the new overarching European securitisation regulation - including STS - as well as the CRR amendment that sets banks' risk weights to securitisation exposures.

    On the topic of supervision, Rabobank credit analysts note it .......

    News Round-up 15 March 2016

  • Indian distressed opportunities targeted

    The Canada Pension Plan Investment Board (CPPIB) and Kotak Mahindra Group have signed an agreement to invest in stressed assets in India. The agreement allows for a total investment of up to US$525m, with CPPIB able to invest up to US$450m.

    The flexible investment mandate seeks to take advantage of the growing opportunity arising from the current stress in the Indian banking .......

    News Round-up 15 March 2016

  • Euro CLOs take off

    Following last Thursday's ECB announcement the European CLO secondary market has finally taken off in terms of both activity and price movement.

    "Post-ECB we have been consistently lifted out of bonds with a lot of buying from macro players and fast money," says one trader. "Consequently, levels have moved much, much tighter."

    The trader continues: "The biggest moves have been .......

    SCIWire 15 March 2016

  • Italian SPV rules amended

    The Bank of Italy has updated its supervisory instructions for banks and financial intermediaries concerning loans granted by securitisation vehicles. There are now six key requirements.

    First, borrowers must be selected by a bank or financial intermediary registered under article 106 of the Italian Banking Act. The securities issued are reserved for qualified investors only, and the bank or intermediary must .......

    News Round-up 14 March 2016

  • Shareholder alignment announced

    Apollo Investment Management, in consultation with its board of directors, is set to reduce its fees for fiscal year 2017. From 1 April 2016 through 31 March 2017, the base management fee will be reduced to 1.50% on gross assets. In addition, the calculation of the incentive fee will include a performance adjustment that could lower the incentive fee rate .......

    Job Swaps 14 March 2016

  • Credit duo to lead Euro expansion

    Waterfall Asset Management has recruited James Cuby and Henrik Malmer in order to set up a London office for the firm. The pair will act as co-heads of the office, tasked with expanding Waterfall's structured credit and direct lending business in the European market.

    Cuby and Malmer spent the last ten years at Investec Bank, where they established and ran .......

    Job Swaps 14 March 2016

  • Euro secondary sluggish

    Despite last week ending strongly in wider credit the European securitisation secondary market remains sluggish.

    Market sentiment continues to be increasingly positive and there are selective buyers in evidence, but for the most part flows and BWIC supply are patchy and liquidity is thin as investors look likely to stay on the sidelines until the wider credit rally has been .......

    SCIWire 14 March 2016

  • MassMutual affiliates to merge

    Babson Capital Management, its subsidiaries Cornerstone Real Estate Advisers and Wood Creek Capital Management, and Baring Asset Management are set to combine under the Barings brand. The combination creates a global multi-asset investment management firm with over US$260bn of assets under management, offices in 20 countries and over 1,700 professionals.

    The firm will be led by Tom Finke, current chairman .......

    Job Swaps 11 March 2016

  • Strategic review nears completion

    In its financial results for the three and twelve months ended 31 December, ZAIS Financial Corp disclosed that its strategic review continues and includes the exploration of merger or sale transactions or a liquidation of its assets. The company last November retained Houlihan Lokey Capital as financial advisor to assist it in evaluating potential strategic alternatives to enhance stockholder value.

    Job Swaps 11 March 2016

  • ECB looks to provide boost

    A new set of measures announced by the ECB could boost ABS supply. The central bank is launching a second TLTRO programme, expanding QE and cutting rates.

    The ECB's deposit rate has been cut by 10bp to -0.4%. Its main refinancing rate has been cut by 5bp to zero.

    The TLTRO 2 programme will - in contrast to the first TLTRO .......

    News 11 March 2016

  • US CLO see-saw

    Activity and price levels continue to see-saw in the US CLO secondary market.

    "Market tone is pretty strong with people trying to be positive after ABS Vegas, but activity and sentiment is up and down," says one trader. "For example, I'm hearing a lot of people saying they're expecting another leg down in lower mezz."

    The trader continues: "Overall, the .......

    SCIWire 10 March 2016

  • CLOs cut oil exposure

    While the oil and gas sectors have been a relatively small part of the leveraged loan universe, US CLO exposure to these sectors varies greatly across deals. Combined with idiosyncratic issues in other sectors, the impact on CLOs has been significant, particularly at the most credit sensitive tranches of the capital structure.

    S&P figures show that loans to firms in .......

    News 10 March 2016

  • Fee waivers introduced

    TICC Capital Corp, in consultation with its special committee, has agreed to a series of ongoing waivers with respect to its management fee and income incentive fee. The move follows a comprehensive process led by the special committee, including a detailed analysis of best-in-class practices in the industry, conducted with the assistance of the firm's financial advisor Morgan Stanley.

    Under .......

    Job Swaps 10 March 2016

  • CLO cov-lite limits increasing

    Evolving definitions of covenant-lite have reduced the number of leveraged loans that count toward US CLO cov-lite purchase limits, while cov lite purchase limits have also increased, says Moody's. The rating agency considers both trends to be negative.

    Moody's bases its conclusions on a review of 419 indentures from CLOs rated between 2012 and 2015. "An increase in carve-outs has .......

    News Round-up 10 March 2016

  • Step-up tranche refinanced

    Apollo Credit Management has refinanced the US$120m class A1b notes from its ALM VIII CLO, marking the first refinancing transaction in the sector since September. The tranche was redeemed at par, plus US$272,856 interest, by issuing replacement securities.

    Deutsche Bank CLO strategists note that the motivation for the refinancing is unusual in that the refinanced tranche is a step-up tranche. .......

    News Round-up 10 March 2016

  • Euro secondary stable

    The European securitisation secondary market remains stable despite signs of an uptick in volume.

    "Yesterday the market was more or less stable despite an increased number of lists," says one trader. "Notably, the large prime RMBS list traded quite well with most of the 24 bonds involved going through in line with recent levels."

    At the same time, the trader .......

    SCIWire 10 March 2016
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