Listen to the latest episode of Credit Exchange with Lisa Lee
Published in London & New York
10 Queen Street Place, London
1345 Avenue of the Americas, New York
Creditflux is an
company
© Creditflux Ltd 2026. All rights reserved. Available by subscription only.
Analysis CLOs
Robust 1H shows resilience of CLOs
by Shant Fabricatorian & Kathryn Gaw
Europe has just posted its best half-year of CLO issuance, while a record wave of repricings in the US helped boost overall issuance in 1H 2026 to around the highest levels ever recorded
Two quarters of geopolitical instability, software price volatility and oil price turmoil didn’t deter global CLO managers from issuing deals. Overall, the first half of 2026 was one of the strongest half years ever.
The reset wave helped prop up the US BSL market, with a record USD 131bn in repricings in 1H26, according to Creditflux data, boosting the overall figure to USD 192bn. In Europe, the market had its best year ever, with total issuance of EUR 56bn.
Jan-Jun global CLO issuance 2015-26
“The first half of the year saw very strong technicals, which led to tighter liability spreads, especially in triple As,” said Ryan Olsen, portfolio manager for CLO tranche investing at Napier Park. “But it’s also been characterised by a continued and still-growing dispersion between quality and manager perception. And that’s also reflected in liability pricing lower in the stack, with top-tier manager mezz pricing significantly inside mid-to-lower-tier managers.”
US private credit CLO deal activity dropped 27% from the year previous amid a barrage of negative headlines. Still, issuance was the third highest for a first half period.
30.5
bn
€
In Europe, the total for new deals was a half-year record
According to Bain Capital, this sector saw strong underlying company fundamentals and healthy transaction volumes across the core middle market. “We continue to see stability in our underlying credit estimates within our private credit CLO portfolios, which speaks to the overall health of the companies,” said Joseph Buchheit, a partner in Bain Capital’s Private Credit Group.
In Europe, EUR 30.5bn in new deals and EUR 25.4bn in repricings across the first six months of the year were both record highs.
“The European loan market has performed well considering the significant number of unexpected incidents in the first half of the year,” said Gianluca Consoli, European leveraged finance portfolio manager at PGIM.
Source: Creditflux
“A resilient and dispersed loan market has created a demanding environment for CLO managers who have seen their core portfolio positions repriced tighter while seeing the tail of weaker credits in their portfolio grow.”
A migration of US and other investors contributed to record momentum in Europe. Diameter, Elmwood and Golub issued their first European prints earlier this year, and market sources have estimated that more than a dozen new entrants will debut their own strategies over the next 12 months.
But CLO arbitrage remained challenging, despite tight liability spreads. “Investors have become more cautious, contributing to a widening in CLO liability spreads,” said Eddie O’Neill, co-head of global leveraged credit at KKR. “At the same time, spreads on underlying loans have continued to tighten, particularly on a nominal spread basis, which has put further pressure on the CLO arbitrage.”
Source: Creditflux
US sees repricing rebound in May
In the US, spreads remained relatively stable despite concerns about an overly-tight environment. The year began at a benchmark level of around 119bps over SOFR, but tier-1 US BSL CLO spreads widened out to the low-to-mid 120s by April. That saw repricing activity curtailed somewhat, before it rebounded strongly in May and June, with spreads having now returned to where they started the year.
European triple A spreads saw a similar trend, widening out from the low 120s over Euribor to the upper 120s across the same period, before likewise returning to their January level.
At manager level, Carlyle has been the dominant player in the US BSL market in the year to date, capturing a 4.64% market share according to Creditflux data. Elmwood took second spot with a share of 3.84%.
Lauren Basmadjian, global head of liquid credit at Carlyle, said that macro and geopolitical volatility have contributed to wider CLO liabilities and modest softening in loan prices in the first half of the year.
She noted she expected amend-and-extend transactions to begin earlier in the year, as there are a lot of companies with 2028 and 2029 maturities trading below par, but is now starting to see these come into the market. “We expect a busy 2H26,” she said.
Methodology
- All data used for these rankings is as of 30 June 2026.
- Our issuance totals exclude double-counting due to jointly arranged deals. In jointly arranged deals, credit is split between the lead and co-arranger.
- For queries and corrections please contact data@creditflux.com.
