Are we ready for another crisis?
Credit managers must brace themselves for stress in 2023, as rates rise and the number of poor performing assets increases. But most CLOs look well-placed and can rely on plump OC cushions 

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  

A fresh approach to loss distribution
Considering how cash balances change over time, loss distribution models can look very different to conventional thinking. So is your CLO’s pricing based on incorrect assumptions?  

The growing role of data in CLO management
The complexity of managing a CLO has made it as much an art as a science, but new technologies are sweeping into the market, according to speakers on a Virtus roundtable discussion.

An alternative way of looking at CLO overlap
Analysing CLO collateral to look for overlap is critical for any CLO investor, but it is normally done either within a portfolio of CLOs or by bilaterally comparing two managers. In one of its latest research pieces, Moody’s Analytics has taken a different approach

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

Woah, we’re halfway there
Judging by the 2020 vintage, European CLO overlap is 50%. But varied approaches to holding bonds and the many loans managers turn down mean there are ways for issuers to outperform

CLOs wheel and deal as overlap increases
2020 CLOs are a different breed to any other vintage. But this cohort features an overlap of almost 40% as CLO issuers have been forced to focus almost entirely on secondary market loans

Moving fast pays off for hedge funds
2020 was an up and down year in credit, and credit hedge fund managers had to move quickly to capture opportunities from the dislocations that inevitably opened up

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

Loan slump brings managers closer
A 19% slide in new US loan volumes last year has left CLO managers with fewer options in the primary market, and portfolio overlap between US managers has increased to 35.3% on average

Europe’s newcomers find ways to stand out
Last year’s new European CLO managers needed to provide something different for investors. In general, they’ve succeeded, with Capital Four having one of the smallest overlap figures in our data

Credit pickers need luck to avoid OC trap
We know what you’re thinking: is my CLO failing its OC test? The truth is, in all this volatility, it can be hard to keep track, unless your deal has high quality liquid loans

 

Fund performance: Index tranche investors make it work from home
March brought a drastic drop in return figures as covid-19 swept across the globe, as Orchard tops the Creditflux performance tables

Star names join Barclays as it pushes into CLOs

Steelmakers forge links in face of overcapacity

Investors gain upper hand in doc negotiations

There are no perfect hedges for CLOs
As the CLO market gets hotter and hotter, investors are seeking hedges against the inevitable downturn. But although there are a wide range of options, there is no consensus on which is best
 

Experienced CSAM holds off boutiques to win biggest prize
Credit Suisse Asset Management became a two-time winner of the Creditflux Manager of the Year award last month after picking up the 2018 trophy in front of a packed house at London’s Landmark Hotel on 9 May

Dedication pays off in risk sharing
Fund managers are pitching dedicated CRT funds to institutional investors as market hits €75 billion in 2017 and US banks start to take notice. By Sayed Kadiri

Drug makers: desperately seeking pain relief
With Teva’s profitable Copaxone being undermined by cheaper alternatives, the company is in need of a pick-me-up. By Euan Hagger

Managers predict skill will win out
We asked managers to predict the year ahead across a range of credit strategies. Overall, they had a positive outlook. By Grace Jennings-Edquist

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