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Global credit funds & CLO's

March 2024 | Issue 262

Published in London & New York.

Opinion

March 2024 | Issue 262

Duncan Sankey,

Portfolio director and head of credit research

Cheyne Capital

Opinion private credit

As banks are forced to offload more risk, SRTs build an increasingly long list of advantages

Thomas Majewski,

Founder & managing partner

Eagle Point Credit Management

Opinion CLOs

The markets are supporting high reset and refi volumes — but sometimes calls are a better option

Past returns

There’s no turning back

Five years ago we were writing about the problems European CLO managers were having with their arbitrage levels. Their solution at the time? Increase leverage.

Over the course of a few years, the average leverage in European CLOs went up from 8.3 times to 9.6 times. That trick will be harder to pull off this time. So far this year the average leverage is already 11.3 turns, with some deals going as high as 13.

And even at those levels the arb is challenging.

Points up front

What will they securitise next?

One of the unspoken joys of the SFVegas conference is discovering the latest, and strangest, asset class to get securitised.

Our favourite this year? Consumer litigation financings. Yes, you really can get tranched exposure to advance payments to individuals or companies to finance lawsuits in exchange for a portion of the potential legal recovery.

What’s next for the litigation settlement ABS industry after it got its own panel in Vegas? Expansion into commercial litigation financing and mass tort litigation financing to law firms?

It really is a wonderful world we live in.

Justice: she’s definitely not blind to the advantages of securitising litigation

Celebrating women in CLOs

As we kick off Women’s History Month it’s worth taking a moment to be thankful for how far the CLO market has come.

There’s still a long way to go before our industry is balanced, but every part of it now has strong female role models, from senior executives at some of the largest asset managers, to leading bankers and lawyers.

We’ll be continuing to support the movement through our Women in CLOs drinks receptions, so if you’re in New York on 17 April or in London on 14 May please join us. Registration details are on www.creditflux.com.

THEY SAID IT

“No one is writing about the fact that net issuance in January was negative because amortisation is so high”

Speaking at SFVegas, Ronni Neeman, global head of CLO research at PGIM Fixed Income, takes us to task for focusing on record primary issuance instead of how the overall CLO market shrank.

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