Opinion
November 2020 | Issue 229
Past returns
Fees on the line
In Creditflux five years ago, we reported that CLO equity investors were insisting on “management fee adjustment clauses” in the event that collateral managers did not consent to a refinancing.
US risk retention rules were due just over a year later and legacy CLOs would have been forced to comply in the event of a refi. So we reported that equity investors were demanding a drop in junior manager fees if a refi was rejected.
A solution was the applicable margin reset, which reworks CLOs. A few AMR auctions occurred this year, most recently on a Seix CLO.
Points up front
(Direct) lending a helping hand in an emergency
Global lockdowns this year may have forced us to confine ourselves to our homes, but for BlackRock’s co-head of US direct lending they opened a window of opportunity. He announced last month that he was leaving his job and would be volunteering as an emergency medical technician in New York.
Leitner tells us that, as an avid mountaineer, he has long wanted to participate in mountain rescue and earn the necessary qualifications. 2020 has afforded him that opportunity with special dispensation for EMT training classes during the height of the pandemic.
“I wish I had pursued this opportunity earlier,” says Leitner. “If you have a passion, I’d encourage you to take it up — there’s no time like the present.”
We commend Leitner for playing a part to support the emergency services at this time and wish him all the best.
Leitner: moving from financing companies to helping save lives
Pup talk from our team
At Creditflux’s US Private Credit event last month, Creditflux teamsters Dan Alderson and Michelle D’souza were analysing the panel discussions and noted that, on an upcoming mid-market CLO discussion, moderated by our own Hugh Minch, they were looking forward to an appearance from Minch’s pet dog.
It turned out, however, that although the hound has gatecrashed numerous Creditflux virtual team meetings, he was too shy to give his opinion on direct lending.
THEY SAID IT
“It’s been a tale of the haves and the have nots”
At Creditflux’s US Private Credit event, binary outcomes in direct lending were discussed and Churchill’s Ken Kencel talked about ‘haves’ and ‘have nots’. But GSO’s Brad Marshall said deal flow from middle ground companies between those two extremes is emerging.
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The cost — a few basis points — is modest compared to the potency of bond buckets
Global credit funds & CLO's
November 2020
| Issue 229Published in London & New York.
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