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Data Secondary
CLO activity stabilises in February as trading and dealer flows level off
Primary CLO issuance and liability management maintain steady pace to 18 February
US CLOs operate in equilibrium
The US CLO market exhibited steady and balanced conditions in February, with trading activity, spread behaviour and dealer positioning pointing toward a market operating in equilibrium.
Secondary trading remained active, while volatility across the capital structure appeared contained, suggesting investors continued to engage selectively across both investment-grade and high-yield segments.
Overall market activity reflected consistent participation from institutional investors, with liquidity conditions supporting orderly trading throughout the month.*
Past 12 months FINRA TRACE monthly reported CLO/CDO volumes
BWIC posted vs traded volume
Secondary market trading remains active
Secondary trading volumes demonstrated sustained engagement across CLO securities, with market participants actively transacting across tranches. Trading flows indicated a functioning two-sided market, where both buyers and sellers were able to execute without significant disruption.
The distribution of activity across the capital structure showed continued participation beyond the highest-rated tranches, highlighting ongoing investor interest in diversified risk exposure.
BWIC activity continued to serve as an important mechanism for price discovery, with posted lists seeing meaningful participation and execution.
Triple A market conditions stay supportive
Top-of-the-capital-structure trading remained stable during February, supported by consistent demand for highly rated CLO liabilities. Execution levels in triple A securities indicated reliable liquidity and continued investor appetite for senior exposure within structured credit.
Trading activity suggested that supply and demand were broadly aligned, allowing transactions to clear efficiently.
US traded CLO BWIC volumes
CLO new issue spreads
Spreads reflect contained volatility
Spread performance during February indicated relatively stable pricing across CLO tranches. Movements in senior spreads remained modest, reinforcing the perception of a market operating within established ranges.
Lower in the capital structure, spread behaviour similarly reflected measured investor positioning, with no indication of disorderly widening or tightening.
Relative value relationships between market segments remained intact, suggesting consistent views regarding risk.
TRACE broker-dealer aggregate CLO/CDO flows
Dealer positioning shows balanced flows
Dealer activity provided one of the clearest signals of February’s market stability. Dealer flows were reported as near flat, indicating that inventories and client demand were largely balanced.
*Note that due to shortened month and other factors, all February 2026 data in this report has an 18 February 2026 cut-off.
Flat positioning typically reflects orderly trading, where dealers are neither absorbing excess supply nor aggressively distributing inventory.
Market participants remained focused on execution efficiency and transaction quality, with issuance reflecting disciplined participation rather than rapid expansion.
*Note that due to shortened month and other factors, all February 2026 data in this report has an 18 February 2026 cut-off.
For further information, contact Jacob Krayn, head of business development, Kopentech: Jacob.Krayn@kopentech.com
Source for all data: Kopentech, TRACE
