Volatility Spills Into CLOs as Junk Coupons Rise, Deal Pulled
- More expensive funding costs may hurt Europe’s CLO issuance
- Oaktree reset was shelved after tapping market in early Feb.
This article is for subscribers only.
Rising uncertainty spurred by hawkish central banks and geopolitical tensions have spilled over into Europe’s CLO market, holding up one offering and driving coupons higher for the riskiest debt in newly-minted deals.
After opening the year on a strong note with tight pricing for an initial clutch of deals, collateralized loan obligations -- one of the most resilient parts of the credit markets this year -- are starting to feel the strain.