CLO MARKET TRENDS: NOVEMBER 2023
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Latest Newsall news
US CLO market healthy despite secondary trading drop
In a recent interview with Victoria Thiele from GlobalCapital, Rob Shrekgast emphasized that despite a weakening loan market and wider mezzanine spreads in October, the US CLO new issuance activity remains robust. CLO new issuance increased to $11.9bn in October, making it the second-busiest month of the year. With BWICs falling to $3.9bn in October, Shrekgast suggests sellers are cautious amid market uncertainty.
Katayama Credit in US market for debut CLO
Rob Shrekgast in his interview with GlobalCapital highlights the evolving dynamics in the CLO market, with tier one managers achieving mid-160bp spreads on triple-A notes, while debut managers, paying at around 205bp-210bp. Despite the tightening spreads seen in the capital stack throughout the year, Shrekgast cautioned that further tightening might be harder to achieve.
Creaky credit sparks ‘high’ dispersion in CLO pricing
Article by Nathan Tipping on Risk.net discusses the resurgence of dispersion in credit markets following 18 months of central bank rate hikes. This trend is particularly noticeable in collateralized loan obligations (CLOs), where pricing has become fragmented, as evident from data provided by KopenTech. The dispersion is attributed to various factors, including differing manager reputations, changing loan market dynamics, and variations in market value of over-collateralization (MVOC) profiles.