CLO managers prep for January deals; market activity light; European SME CLO view improves

By Cristal Cody

Tupelo, Miss., Jan. 6 – CLO managers are gearing up for new issuance later in January, according to market sources on Tuesday.

Activity remains light as the market shakes off 2014, sources report.

“Haven’t really seen anything yet,” one source said.

CLO managers including PineBridge Investments LLC and Apollo Credit Management (CLO) LLC are expected to bring deals over the next few weeks, according to market sources.

Global CLO managers priced $161 billion of CLOs in 2014, according to data compiled by Prospect News.

CLO issuance is expected to decline to around $100 billion in 2015 ahead of the implementation of risk retention regulations.

Fitch Ratings said in a report on Tuesday the outlook for European SME CLO asset performance has improved to stable.

The exceptions are Portuguese SME CLOs, which have improved to stable/declining, and Italian SME CLOs, which have a declining outlook, according to the report.

“The overall performance of the monitored European SME CLOs remained roughly stable in December across all countries, with the exception of the Spanish SME CLOs that continued to see a declining trend in over-90-day delinquencies,” Fitch said. “In Spain, the average delinquency over 90 days decreased to 2.8% in December 2014 from 4% in December 2013.”

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