More than one-third of collateralized loan obligations that closed between January and May of this year have non-call periods less than the standard two years, according to Moodys Investors Service
Widening spreads have been a consistent staple in the June-through-August time frame for each of the past four years across the capital stack.
So far this year, seven middle market collateralized loan obligations have priced from six issuers, for a primary volume of $3.0 billion.
During the second quarter, the Salt Lake City Bank told a total of $574 million of CDOs for proceeds of $437 million, generating a realized pre-tax loss of $137 million.
"Market participants seem to have realized that July follows June and that the deadline for positions not in place in December 2013 is upon banks," Deutsche Bank analyst Bjarni Torfason wrote.
The limited number of buyers able to write big tickets allows them players to dictate terms.
Risk-retention rules could thin the ranks of CLO managers; the industry was hoping for a workaround, but what it got is pretty much unworkable.
The U.S. market for collateralized loan obligations would shrink by 75% if proposed risk-retention rules are implemented, according to the Loan Syndication and Trading Association.
DFG Taps Goldman Vet, Barclays Bulks Up on CMBS, Ares Adds Jeffrey Kramer and the ASF Retains Mike Williams as Policy Adviser
A shift in the leveraged loan market has intensified grumbling among CLO managers about the way Standard & Poors rates the senior tranches of these deals.
Firm: 3i Debt Management
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