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Better, But Not Good: US 2Q CLO Issuance Jumps To $18B

  quarterly CLO issuance

U.S. CLO issuance totaled $17.99 billion via 42 vehicles in the second quarter. While that's more than a two-fold increase from the $8.2 billion of issuance in the first quarter, it's at the very low end of the recent range over the past three years, according to LCD, an offering of S&P Global Market Intelligence.

Year to date, U.S. CLO issuance totals $26.23 billion via 62 vehicles. As was the case in the broader leveraged loan market, sentiment improved in CLOs in the second quarter, but the market was still far from robust. Issuance remained heavily biased towards seasoned managers, with a few exceptions. Keeping the market in check: The upcoming Dec. 24 deadline to comply with risk retention, challenging arbitrage, and difficulty sourcing collateral, loan managers say.

Of course, the macroeconomic risk surrounding Brexit presents a new challenge.

You can read more about how CLOs work here. Follow Andrew Park for CLO news and LCD News on Twitter.

This story is part of analysis which first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets.

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