CLOs

Having been the best performing asset class across fixed income in 2023, collateralised loan obligations (CLOs) have spent the first half of this year on similar form with record levels of issuance meeting equally strong demand from a broadening range of investors.

The European asset-backed securities (ABS) market saw a record issuance last week with €5bn of primary issuance.

Following an incredible 2023, collateralised loan obligation (CLO) investors are again having a great year with the asset class outperforming the more traditional asset classes.

Douglas Charleston, Partner & Portfolio Management, concludes the first quarter in 2024 for the Asset-Backed Securities team, noting that while major economies remain resilient, the rates markets have undergone significant shifts, with central banks reassessing their rate cut expectations.

After delivering a stunning 2023, collateralised loan obligations (CLOs) were once again one of the top performers in Q1. That leaves us with the question, where do we go from here?

Aza Teeuwen reflects on a busy quarter for the Asset-Backed Securities team, highlighting the primary deals and trading that occurred all the way through the quarter until the end of December, the performance of ABS for the quarter, and his confidence that ABS is in a good position to carry its strong momentum into 2024.

Recently, our credit experts delved into the performance of the high-yield market, revealing how the maturity wall does not seem to be a significant challenge for most companies.

Elena Rinaldi gives an update on the market, highlighting the peak in rates in the quarter, the performance of ABS for the quarter, and delving deeper into the primary issuance activity over the summer months.

Last week Aza Teeuwen and our ABS team visited the Global ABS conference in Barcelona. One key discussion point in CLOs was around the lack of leveraged loan supply and the resultant sharp slowdown in the primary market

European Asset Backed Securities has been one of the few asset classes that has showed positive performance this year, Aza Teeuwen answers the million dollar question, how do you position for this?

As we approach the end of the economic cycle, tighter documentation is becoming increasingly important in providing downside protection against credit and extension risk of CLOs, says Pauline Quirin.

With Norinchukin Bank reportedly looking again at CLOs, Aza Teeuwen looks at the potential impact the return of the one of the market’s biggest buyers might have on spreads.