Publication 12 pages

TMF Group Trends: Taking the pulse of the CLO market

16 July 2017

Several emerging risks could cause a dent in the Collateralised Loan Obligation (CLO) market, according to the latest Trends report from TMF Group.

Economies in Europe are growing and credit fundamentals seem positive, which is translating into demand for collateralised loan obligations, more commonly known as CLOs. It’s part of a search for yield without undue risk, and is bringing in both new and ‘old’ investors.

The report canvassed the views of a group of CLO managers and Structured Finance experts in Europe and the US to offer insights on the current trends in the CLO market, and provide an outlook of the market expectations, challenges, and developments. Key findings include:

  • Most experts believe 2017’s issuance will be impacted by risk retention regulations as in 2016
  • Almost half of the experts say the Euro CLO 2017 issuance will be between €13bn and €15bn
  • CLO demand in the US is shrinking due to the implementation of risk retention and the lack of positive effects of quantitative easing
  • More than 3/4 believe regulators are underestimating the impact of proposed and implemented regulations for the financial markets in general

Download TMF Group Trends: Taking the pulse in the CLO market to learn more.

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