Issuance of CLOs in the U.S. market this year fell short of 2014 totals will fall further next year, Wells Fargo Securities Senior Analyst David Preston said in a recent report.
Regiment Capital Advisors sold the management contracts to four collateralized loan obligations totaling $1.6 billion to Sankaty Advisors.
The largest U.S. collateralized loan obligation manager by number of deals, it is raising its own capital to finance retention of stakes in its deals.
After declining in each of the three previous months, issuance of U.S. collateralized loan obligations picked up in October to $8 billion, its highest level since June, according to Thomson Reuters LPC.
Barclays and JPMorgan are both forecasting a decline in issuance of collateralized loan obligations next year, citing a variety of regulatory and market headwinds tamping down demand for the securities.
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.
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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: Broadmoor Consulting LLC
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As concerns mount about the riskier loans being packaged into commercial mortgage backeds, several banks have come up with a new strategy for making deals more attractive to investors. They are boosting exposure to both high quality and highly leveraged mortgages.Current Issue