Red-hot demand for CLO debt has triggered talk that disintermediation could become a trend in structured credit, although few believe full-blown self-syndication by CLO managers is on the horizon any time soon.
CLO resets are elbowing their way into the European market, having become a prominent feature in the US. On Tuesday, KKR Credit Advisors priced a rare reset of the Avoca XII CLO, tightening from previous record lows.
The US credit markets shut down on Tuesday as bankers and investors across the northern East Coast hunkered down for a snowstorm.
Chenavari priced its third post-crisis European CLO on Friday, the €365.35m Toro European CLO 3 trade.
The big takeaway on the CLO market from ABS Vegas is that new issuance should remain fairly healthy in 2017, even though loan repricings are making arbitrage difficult.
Despite concerns over the availability of leveraged loans and managers’ focus on refinancing deals, European CLO supply so far this year has outpaced the start to 2016, according to Thomson Reuters LPC data.