CLOs

  • CLO equity continues excelling

    US CLO equity is one of the few remaining fixed income products offering high carry. The segment posted an average cashflow return of 25% last year across 463 deals.

    Based on a cashflow study and prices of US equity tranches, JPMorgan CLO analysts note that average total return last year was 8.2% for US 1.0 equity and 16.1% for 2.0 .......

    News 28 February 2014

  • CLO tail risk approach unveiled

    Moody's has updated its approach to assessing tail-end risk in CLOs that hold long-dated assets. The update - which the agency proposed in a request for comment on 11 December 2013 - will not affect any current CLO ratings.

    Under the new approach, Moody's will consider in its analysis capping ratings at certain time horizons before the maturity of a .......

    News Round-up 28 February 2014

  • Novel BWIC for Euro CLOs

    Yesterday proved to be a busy session for the European CLO secondary market. Amidst the strong supply was what is believed to be the first CLO 2.0 single-B BWIC.

    That 2.0 original single-B list included tranches from Dryden 29 Euro CLO 2013, Richmond Park CLO and St Paul's CLO III, all of which were issued towards the end of last .......

    Market Reports 27 February 2014

  • CLO modelling tool enhanced

    Codean has released Codean CLO Analytics version 4.0, which includes the firm's structuring and rating analyser module SaRA. The service aims to provide investment banks, asset managers and others arranging new CLO transactions with the analytical tools to do so.

    SaRA is a deal modelling tool with over 700 existing CLO deal models as templates to start from. This is .......

    News Round-up 27 February 2014

  • Secondary markets leader joins

    Stream Capital has appointed Fabrice Toledano as director for structured credit in Geneva. He will lead the secondary markets team and focus on CLOs, CDOs and leveraged loans as well credit-linked notes and performance swaps.

    Toledano was most recently responsible for global macro hedge fund investments at Unigestion. He has also worked as a structurer and trader in credit and .......

    Job Swaps 27 February 2014

  • CLO relief in sight?

    The US House Committee on Financial Services held a hearing yesterday on the impact of the Dodd-Frank Act on ABS. Witnesses included representatives from the LSTA, Georgetown University Law Center, Center for Capital Markets Competitiveness, CRE Finance Council and SFIG.

    Testimony addressed Representative Barr's draft legislation on CLOs and Volcker - which calls for grandfathering of all CLOs issued before .......

    News Round-up 27 February 2014

  • CVC hires for middle-market

    CVC Credit Partners has appointed Neale Broadhead as md and portfolio manager in London. He will focus on the origination and execution of European middle-market lending opportunities and report to Tom Newberry.

    Broadhead was most recently at Lloyds, where he helped to establish the mid-market origination team. He has also worked for BNP Paribas and The Industrial Bank of Japan .......

    Job Swaps 27 February 2014

  • Strong portfolio management required

    Approximately US$148bn of CLOs was issued across 93 different managers during a very stable credit environment from January 2010 through December 2013. Fitch notes that credit surveillance and portfolio optimisation are key to sustaining performance if the credit environment worsens, causing an increased default rate for leveraged loans.

    "A changing credit and regulatory environment increases the need of strong portfolio .......

    News Round-up 26 February 2014

  • Spanish sovereign ceiling lifted

    Moody's has raised the maximum achievable rating for Spanish structured finance transactions to A1 from A3, following the upgrade of Spain's government bond rating to Baa2 from Baa3 and its local and foreign currency bond and deposit ceilings to A1 from A3. The move reflects improvements in institutional strength and reduced susceptibility to event risk, the agency says.

    Moody's is .......

    News Round-up 26 February 2014

  • CLO vet joins broker

    Mario Verna has joined Guggenheim Partners in New York as an md in CLO banking. He was previously at Krypton Advisors, where he sourced investors for banks to hedge their loan portfolios through securitisations and risk participations.

    Verna has also worked at Deutsche Bank, where he ran the bank's global securitisation programme, and at Chase and JPMorgan in CLO roles. .......

    Job Swaps 25 February 2014

  • TRACE reprieve for CDOs, CMBS

    FINRA will exclude CDOs, CBOs, CLOs and non-agency CMBS from its proposal to expand TRACE's coverage of securitised products (SCI 5 November 2013). The move comes after SIFMA submitted a comment letter on the proposal to the SEC (SCI 9 January).

    Specifically, CDOs, CBOs, CLOs and non-agency CMBS will not be classified as 'asset-backed securities' (as defined in proposed FINRA .......

    News Round-up 25 February 2014

  • Data transparency offered

    Moody's Analytics has launched a new Structured Finance Portal that is designed to provide enhanced content, increased data transparency and innovative analytics. Initially focusing on CLOs, the service aims to deliver greater operational efficiency by removing the manual process typically associated with normalising and aggregating data.

    "With our new Structured Finance Portal, users will have a clear view into the .......

    News Round-up 24 February 2014

  • Key man replacements made

    Investec Bank has issued key person replacement notices for the Gresham Capital CLO I, II, III, IV and V deals. James Cuby, Steve Torr and Richard Swift join Henrik Malmer as the key persons on the five transactions.

    .......

    Job Swaps 20 February 2014

  • Euro CLO equity in demand

    European CLO investors are becoming increasingly competitive in their search for yield. Equity pieces are particularly well bid at present, as investors reassess default assumptions to acquire paper.

    "Anything with a high yield is very well bid right now. Last week, for example, we saw good equity pieces of bonds such as CONTE 2007-1X and OHECP 2006-1X in the market. .......

    Market Reports 19 February 2014

  • MSHDA case to set precedent?

    The Lehman bankruptcy court in December applied the US Bankruptcy Code's safe harbour for swaps in determining that the provisions of a swap agreement Lehman was a party to with the Michigan State Housing Development Authority (MSHDA), which addressed the calculation of settlement amounts upon termination of the swap, when liquidation provisions fall within the safe harbour. Moody's notes that .......

    News Round-up 18 February 2014

  • 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
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