Sign In  |  Register  |  About Los Altos  |  Contact Us

Los Altos, CA
September 01, 2020 1:26pm
7-Day Forecast | Traffic
  • Search Hotels in Los Altos

  • CHECK-IN:
  • CHECK-OUT:
  • ROOMS:

KBRA Releases Research – Structured Credit Trend Watch: Meet Me in the Middle (Market)

KBRA releases research examining trends across the structured credit landscape, including issuance, spreads, and macro risks. Middle market collateralized loan obligations (CLO) have a record issuance year in sight and are on pace to deliver nearly $23 billion in CLO paper for the full year―activity that would surpass the $22 billion high-water mark from 2021 (the pandemic rebound year). Meanwhile, broadly syndicated loan (BSL) CLOs are grappling with an arbitrage issue that resulted in a year-over-year issuance drop of around 33%. Funding costs for BSL CLO liabilites have risen disproportionate to spreads on leverage loans during the Federal Reserve’s 18-month hiking cycle, squeezing excess interest to their lowest levels in years.

While the Fed recently pushed pause on another increase, its commitment to returning inflation to the 2% objective means that rates will likely remain “higher for longer” at a minimum. This could prolong the arbitrage issue facing the BSL market if liability spreads do not continue to tighten, tempering issuance levels. That said, middle market CLOs have already surpassed their 2022 issuance totals.

In addition to the trends noted above, we discuss the middle market sector and provide a recap of KBRA’s 2023 rating and surveillance activity.

Click here to view the report.

Related Publications

About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.

Contacts

Primary Authors



Sean Malone, CFA, Managing Director

+1 646-731-2436

sean.malone@kbra.com



Gabriele Gramazio, Senior Director

+44 20 8148 1001

gabriele.gramazio@kbra.com



Additional Contacts



Eric Hudson, Senior Managing Director, Global Head of Structured Credit Ratings

+1 646-731-3320

eric.hudson@kbra.com



Eric Thompson, Senior Managing Director, Global Head of Structured Finance Ratings

+1 646-731-3320

eric.thompson@kbra.com



Business Development Contact

Jason Lilien, Managing Director

+1 646-731-2442

jason.lilien@kbra.com

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
 
Copyright © 2010-2020 LosAltos.com & California Media Partners, LLC. All rights reserved.