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Opinion
July 2023 | Issue 256
Past returns
Truly transatlantic
10 years ago we reported on Axa Investment Managers’ plans to enter the US CLO market.
Axa went on to price Allegro CLO I six months later, in January 2014. Since then, it has launched 16 US CLOs. Allegro XV, the most recent deal in the series, priced at the end of April 2022.
The new business was spearheaded by Jean-Philippe Levilain. In 2019 he flipped things around by returning to France to lead CBAM’s plans to become a European CLO manager, an ambition he helped achieve in June 2020 with the pricing of Vendome Funding.
Points up front
Get off the bus!
As well as fascinating insights into an important asset class, delegates to our private credit conference also enjoyed a bumper crop of business metaphors. Blackstone’s Brad Marshall kicked things off with an impressive skit on how the private credit market is like his teenage son.
But our regular columnist Randy Schwimmer wasn’t going down without a fight, and pulled out a metaphor comparing US banks to school buses.
Post-covid, he explained, buses are driving around empty, as everyone’s moved to private transport. Schwimmer certainly triggered a passionate debate with his metaphor. But it wasn’t about private credit, it was about school transport options — and various parents weighed in with their experiences.
Business metaphors are like school buses: you wait ages for one, then two come along at once
Don’t despair
It’s been a quiet month for CLOs, and we were feeling a little down at Creditflux about the struggles of our favourite part of the credit market. A senior banker (rightly) admonished us, saying: “Don’t lose faith in CLOs! As you’ve pointed out many times, they are a resilient product.”
A day later Bain priced Bain Capital Credit CLO 2023-3, the second largest CLO of the year. Even better, the triple-A spreads were down to Sofr plus 180 basis points, suggesting that the much lamented arbitrage may be improving.
It’s too soon to tell if Bain will be the start of a flood or a trickle, but we’re keeping our fingers crossed.
THEY SAID IT
“You’re not Gen Z, you’re Gen Private Credit”
Blackstone’s Brad Marshall tells the Debtwire Private Credit conference that the industry is almost exactly as old as his son, and has gone through much the same growing pains before finally coming of age.
Global credit funds & CLO's
July 2023 | Issue 256
Published in London & New York.
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