CLOs

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • '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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • Strong showing seen for CDOs

    SCI's PriceABS data captured 765 CLO and 93 CDO line items this week, with 156 and 44 respectively recorded yesterday, suggesting strong secondary activity on both sides of the Atlantic. A range of bonds were out for the bid, including a couple of Trups CDO tranches that were affected by the recent American Bancorp case (SCI 11 June).

    Market Reports 20 June 2014

  • Tough times

    Recruitment quiet as markets squeezed

    The tone in structured finance recruitment on each side of the Atlantic is cautious at best. While hiring continues in both the US and Europe, it is limited and must be set against the backdrop of other large teams being closed down.

    Partially the issue is that markets are not providing the kind of opportunities that people had hoped for. .......

    News Analysis 20 June 2014

  • Growth pains

    European CLO market constraints examined

    European CLO issuance volume is expected to reach €10bn-€15bn across 30 transactions this year. Risk retention requirements and the availability of collateral continue to constrain the growth of the leveraged loan CLO market, while a number of hurdles are impeding the re-emergence of SME CLOs.

    European leveraged loan CLO structures are likely to remain standardised, with tranches rated Aaa to .......

    News Analysis 18 June 2014

  • FOIF lists

    GLI Finance says that it transferred two of its CLO investments to Fair Oaks Income Fund (FOIF) for US$20.4m in cash and 34,298,425 in FOIF shares at the issue price of US$1, subject to a two-year lock-in agreement. The move follows FOIF's share placement - which raised US$114.5m - and admission to trading on the LSE Specialist Fund Market yesterday .......

    News Round-up 13 June 2014

  • Discount bargains

    Early CLO refinancings provide investor opportunities

    New US CLO structures with senior tranches offered at both par and at a discount are creating opportunities for investors to capitalise on early refinancings. The discount bonds often appear to be undervalued compared to similar par bonds.

    A series of deals have recently been issued with a pair of pari passu floating-rate tranches. The tranches have been identical save .......

    News Analysis 11 June 2014
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