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May 2022 | Issue 245
Past returns
‘Stabilisation’ provides back-up
Five years ago in Creditflux, we reported that Wells Fargo had offered to buy tranches in an Octagon Credit Investors’ CLO to support execution. This ‘stabilisation manager’ role meant the CLO refinancing had support if there was insufficient demand in the open market.
In recent years banks have taken more radical steps. In March 2020, Cascade Funding decided to terminate an upcoming CRE CLO on the grounds of “market disruption”.
It emerged that Bancorp Bank, which was selling over $800 million of assets towards the securitisation, attempted to salvage the deal by agreeing to buy bonds in the CRE CLO at 199 basis points (1bp inside a limit that meant Cascade could not use its market disruption clause).
Points up front
Italian international tackles banking after rugby
In his latest column, on page 21, Thomas Majewski draws similarities between the CLO market and a youth soccer game. Turns out there might also be parallels between investment banking and rugby.
Marco Rivaro, Natixis’s head of financing and credit solutions for southern Europe, is living proof of this. Before embarking on a 20-year career in credit sales, Rivaro played for the Italian rugby team, representing the Azzurri during two Six Nations campaigns.
The centre was quoted as saying that, although he loved rugby, it was exhausting and intense. A switch to banking seems just the remedy for that.
Rivaro: played as both a centre and on the wings. It seems he was always destined to provide full capital structure solutions
It’s all me, me, me
A study last month by the University of Marburg found that narcissistic fund managers are up to 34% more likely to deviate from their advertised investment style, and they tend to underperform non-narcissists.
The study also analysed LinkedIn bios of fund managers and concluded that the longer these bios and the greater the use of first-person singular (I, me), the worse returns tended to be.
We wonder what the researchers make of bios that go a step further and commit the heinous crime of referring to themselves in the third-person.
“CLO triple As are attractive lending opportunities”
US Bank’s head of fixed income and capital markets Stephen Philipson tells Creditflux the firm is set to become a big buyer of senior CLO tranches in loan format.
Global credit funds & CLO's
May 2022 | Issue 245
Published in London & New York.
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