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After a long weekend, US investors came back to a busy primary market. Despite the weaker tone, investment banks announced a handful of new deals, all of which were heavily oversubscribed and from a healthy variety of issuers.

CLO investors like to talk a lot about arbitrage, or rather the lack of it. Arbitrage is what is left of the monthly interest on the leverage loans in the CLO pool once the liabilities have been paid, and it is the main reason why a growing number of investors have been buying CLO equity in the last 18 months.

In our latest video we hear from Partner and Portfolio Manager Ben Hayward as looks back on the performance of the ABS strategies in 2018 and looks ahead to the coming year.

All banks’ highest quality capital is supposed to be permanent or perpetual. However, many bank regulators around the world allow banks to issue Additional Tier 1 Capital, colloquially known as ‘Coco’ bonds, as part of this capital base. These bonds are perpetual, but the bank has the option to call them after a specified period, typically five, seven or 10 years. These securities therefore tend to trade to the call date, and not to perpetuity, as investors rightly or wrongly assume that the banks will probably call and refinance these securities. The banks are under no obligation to do this, and some have said that that they would only do so if it was in their economic interest come the call date.

In our latest video Chris Bowie looks at the performance of the Outcome Driven strategy in 2018 and looks forward to 2019.

In our latest video Eoin Walsh looks back at performance for 2018, and provides outlook for the year ahead.