CLOs managers are responding to tough market conditions by making changes to their products, for example proposing to remove buckets for discounted assets.
Investors are showing little demand for new issuance of CLOs and trading in the secondary market. CLOs are being sold off and are meeting with few potential buyer options.
The SEC’s proposal on disclosure requirements and other standards for hedge funds, private equity funds and venture capital funds could have negative impacts for CLOs, SFA and others warn.
A sharp decline in refinance and restructuring activity helped drive issuance of U.S. CLO sharply lower in the first quarter. Volume was up, however, in CRE deals. (Includes two data charts.)
The Structured Finance Association is evaluating the most popular corporate ESG frameworks to see how they could be applied in the securitization industry.
When looking at activity by rating services in 2020, the SEC found problems involving ABS and CLOs, among other issues. The regulator as usual didn’t identify the offenders.
Refinance and restructuring deals accounted for just over half of last year's record $459.84 billion of CLO and CDO issuance. The major collateral groups all posted big gains from 2020, though CRE faltered a bit in the fourth quarter.
The biggest decline in CLO issuance came in refinance and restructuring transactions, where volume fell 26% from the second to the third quarter. Refi CLO activity still accounted for 47% of new issuance. (Includes two data charts.)
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