From zero to hero
CLO ETFs have grown into a $5bn market and proved their worth in difficult periods. We sat down with managers in the space to discuss these achievements — and what the future holds

CLO Census: It’s time to put the shop in order
After a lacklustre year for the CLO market, the 539 respondents to our comprehensive survey are increasingly calling for structural changes, from electronic trading to standardised documents

Rope-a-dope brings knock-out returns
Post-pandemic US and European CLOs delivered mid-teen equity returns in 2022, despite a barrage of weak macroeconomic news and what could have been a heavyweight Libor mismatch  

Not every CLO can be a winner
The CLO industry has undeniably performed well enough to justify the plaudits it receives. But there will always be some unloved CLO tranches that slip into triple C territory

We can cope with downgrades again

You seem familiar
The overlap between European CLOs has risen to 51.6%, but the largest issuers are only slightly more aligned to their peers at 55.19% — so bonds are proving to be an important differentiator

I’ll see your 2020 and raise you 2021
Discounted loans, Libor floors and bond flexibility helped make 2021 an even better year for CLO returns than 2020, as US CLOs distributed 15.54% and European CLOs paid 13.93% annualised

Still plenty more fish in the triple C

We were battered in 2020 — but we weren’t beaten
The CLO industry has survived a year blighted by covid-19. We talk to portfolio managers about the strengths of CLOs and preparations for what was expected to be a ‘cataclysmic’ recession

Managers weigh up matters of principal
CLO managers that were able to avoid OC traps made double-digit equity distributions in Q2, despite the headwinds. But these firms tended not to be among those that built the most par

Trading places: it can pay to bet on the little guy
It’s assumed investors know how good a CLO manager is by the rate at which they trade their way through a crisis. But this time fi ve small, nimble managers are outperforming the market

Managers spot opportunity as leveraged loans soften
An abundance of US leveraged loan issuance helped soften secondary prices even though the overall market is highly bid. Meanwhile, investors’ preference for floating rate paper hit high yield

Making it to the top: women reflect on changes in the CLO industry
As a growing number of women break the glass ceiling and take senior positions in CLO firms, Creditflux asked about the opportunities and challenges they face. By Michelle D’Souza

CLO managers like range of options
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Leading fund: Lupus Alpha CLO Opportunity Notes I
Single-B CLO trades boost Lupus Alpha asset Management

Things aren’t always what they seem
Buy CLO triple As but don’t be fooled by diversity scores; take a look at credit index futures if you need liquidity; and watch out for quasi-mid market loans appearing in CLOs

Heavy equipment suppliers: slowly crawling out of the mud
There are tentative signs that heavy equipment manufacturers are finally pulling themselves out of the mire

Technicals frustrate managers
In the US, high yield managers unable to buy into commodities have missed a rally. Their European counterparts have been hit by falling yields

What rates really mean to credit
Credit portfolio managers should take better account of the correlation between rates and credit

CLO market powers ahead in Q1
After a busy first quarter, our regular CLO industry snapshot – which ranks managers, arrangers, trustees and counsels – shows Carlyle and BAML doing well

Finding inefficiencies in iTraxx
Credit derivative indices are big and liquid. But detailed analysis of their historical performance shows they are not always efficient. By Davide Avino and Ogonna Nneji

Cable operators: Event risk has investors in a bind
Acquisition could turn various US investment grade cable operator bonds into junk – and there are no change of control covenants that would let holders escape. Euan Hagger reports

Biggest managers deal their way to bigger share of CLO market
Mergers have helped the largest managers to increase dramatically their share of the CLO market. But as Arrowpoint shows, there is still room for new entrants

GSO Capital stretches CLO lead
GSO may be cementing its position at the top of our ranking of CLO managers by total assets under management, but beneath it the list is in constant flux

All your CDS models are wrong
It is a common belief that it is simple to extract implied default probabilities from CDS spreads. But, argues Robert Jarrow, the conventional methods are drastically flawed