SCIWire

US CLOs focus on equity




The bottom of the stack has been the main focus for US CLO secondary market this week.

"It's a snow day in New York today, so it could be pretty quiet with a few lists being cancelled," says one trader. "But so far this week we've seen a lot more equity than anything else - it has accounted for about half the line items in for the bid."

The trader continues: "That's unsurprising given that the repricing going on in the loan market has caused equity softening. However, volumes haven't been as high as they might be as there's still a reluctance to sell-down in what is an overall positive CLO environment."

Indeed, the trader reports "The rest of the stack remains firm, but there is a noticeable lack of paper especially in double- and single-As. Hopefully, increasing new issuance will spark growth in secondary activity as rotation trades kick in."

There are currently three BWICs on the US CLO calendar for today. The largest is a two line single- and triple-A combination due at 12:00 New York time - $17.5m of GWOLF 2013-1A B and $171.5m of KVK 2013-2A A. Neither of the bonds has covered on PriceABS in the past three months.

09/02/2017 14:47:37



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