How many CLOs will be called this year?
Most CLOs are called when loan market prices are high. Distributions and equity NAV are also important, and they suggest that over 30 2017 and 2018 deals are now ripe for redemption

What matters is what you do with it
CLO managers yearn for flexibility so they can take advantage when credit sells off. But it isn’t enough on its own: triple C-flex CLOs saw portfolios erode this year, while CBOs outperformed

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

We’re drifting apart
Everyone’s issuing US CLOs these days and it is tempting to believe the crowd of managers is blending into one. However, overall portfolio overlap has dropped to 37.7% across 2021 CLOs  

Still plenty more fish in the triple C

Lighten up, these are due an upgrade
CLO triple C buckets were overflowing last year, but the average exposure is now 7.3%. That is still close to trigger levels, but CLO managers are relaxed, as further loan upgrades are on the horizon

Chin up – it’s been a pretty good effort
CLO managers did well to survive the covid-19 crash in loan valuations — but they failed to fully capitalise on the ensuing volatility, say participants in the Creditflux CLO Census 2020

Investors gain upper hand in doc negotiations

Higher leverage is on the horizon - but, for now, take in the MFN sunsets
It’s clear from our analysis of most favoured nation protections and sunsets that strong demand for loans is enabling borrowers to insist on advantageous terms even as they increase leverage

US pensions look beyond equities
US pension funds dramatically lowered their allocations to equity in the decade ending in 2016 as they diversified into illiquid and alternative assets. By Grace Jennings-Edquist

Investing ethically is worth it
Managers could see less volatile returns as a result of their increasing adoption of ESG-friendly portfolios; meanwhile direct lending is spreading across Europe

Move up the stack to avoid implosion
Pundit warns investors to be concerned about return of their principal – but senior loans may be a safe haven as credit yields are squeezed and high yield becomes crowded

Real money chooses European credit
Creditflux’s biggest ever survey of institutional investors shows that real money investors are gravitating towards European credit

Finding value: spotting risk
US retail, Saudi sovereign and mid-market technology are just some of the sectors that credit specialists across the sell side and buy side commented on last month

A clash of views on credit
Recent volatility has shattered any consensus that existed on corporate credit. Buy-side firms, in particular, have been putting forth sharply contrasting views of late

Not shrinking but shifting
Volatility and back-bidding has driven CLO trading off b-wics, but as Trace data shows, the secondary market remains in robust health

Medical device makers: Rising leverage may threaten health
Medical device companies have piled on debt while making large acquisitions – and they aren't bringing it back down

Finding the best managers in credit
The most prestigious awards in credit make their return on 4 May in London

Cream of the credit research
In our first round-up of last month's most eye-catching credit research, we pick pieces on energy options, green bonds and using tranches as CLO hedgesIn our first round-up of last month's most eye-catching credit research, we pick pieces on energy options, green bonds and using tranches as CLO hedges

Petrobras: In deep water – and sinking deeper
It has $135 billion in debt and its credit standing rests on a signature from its auditor. Petrobras is a credit for brave investors

European direct lenders strike €25 million sweet spot
Many new entrants to the European direct lending market are finding that they can put assets to work by making loans in the €20 million to €30 million range

Keeping in sync with sinking bonds
Jan-Frederik Mai and Marc Wittlinger describe a technique for pricing bonds that have a random sinking fund feature without the need to resort to time-consuming Monte Carlo algorithms

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

BAML snatches top spot from Citi
Bank of America Merrill Lynch beats off regular winner Citi by a whisker in second quarter race to be world number one CLO arranger

In search of a grand unifying theory
Tomasz Bielecki, Areski Cousin, Stéphane Crépey and Alexander Herbertsson describe the construction of a model that aims to make credit correlation work bottom-up and top-down