Wondering if anyone can comment on the current CDO/CLO industry. Current market trends, amount of new issuance, regulation post crisis. Is this still a dead market? Do you see it ever making a comeback?
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Seems as though there is still life in the CLO space based on the following bloomberg articles:
https://www.bloomberg.com/news/articles/2018-02-15/wall-street-games-th…
https://www.bloomberg.com/news/articles/2018-02-09/clo-managers-exempt-…
I could be wrong as I am not that familiar with the activity in the credit market.
Thank you for the links.
interested as well
as someone who works in the CLO space, things are looking good. more issuances we had in q1 than we've had in awhile. Adios risk retention
CLO new issuance is alive and well. It has been for several years. CLOs held up vastly better than the ABS CDOs that famously went to zero and are no longer manufactured. The revival of CRE CLOs has been a little slower, but getting some traction. There was about ~120bln of new issue in the CLO space in 2017.
Stats from BLMG: 2016 CLO volume: 72.42bn 2017: 119.85bn 2018 YTD: 52.317bn ~150bn pace
It is picking up considerably. our team here is ramping up our CLO side after mainly focusing on on-the-run ABS. Pretty excited to learn TBH
Seeing the same thing on our desks. Has a lot to do with the 3month LIBOR sitting around 2.3% coupled with the fact that the leveraged loan market has positive exposure to a rising rate environment. As for regulation read up Basel III and the Volcker Rule in relation to the CDO/CLO space. The market for these instruments is anything but dead.
money market bonds used to be ~1.3, 1.4 6 months ago. Crazy how much rates are going up
there is virtually no subprime rmbs market anymore, and to go even further virtually no non-conforming/ non-agency rmbs market outside of jumbo so obviously cdo markets took a big volume hit. It some ways it is a credit market fail but we will see
CLOs only: This market never really went anywhere. Issuance dropped to nothing for 2years during the crisis because nobody was lending - therefore there werent any loans to collateralize new issuance. However, I'd note that existing CLOs didnt blow up like the subprime CDOs did.
Most CLOs are backed by leveraged loans that finance PE sponsor LBOs. As long as PE sponsors exist, there will be CLOs (or some product similar to them).
http://www.leveragedloan.com/surpassing-expectations-2017-us-clo-issuan…
what do you see as the future of CDOs? (Originally Posted: 06/30/2007)
Given recent events, what do you guys see as the future of CDOs?
less issuance for awhile? no subprime issuance? more secondary trading as people try to evaluate / unload existing CDOs?
i'm curious about this question too. I think less issuance for a while until the mess clears up. What do you guys think about CDO's long term, and espeically boutique firms that issue CDO's?
bump...
whats a cdo?
Collateralized Debt Obligation
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