The Last Tranche

In this episode of the Last Tranche, Joe Rotondo, senior portfolio manager on the credit investments team at MidOcean Partners, looks back on a turbulent year for the leveraged loan asset class.

Rotondo discusses the key trends and moments that influenced the loan market through the last 12 months through to the present day, from the general bullishness at the start of the year, to the downturn over the summer and the slowdown in new issue supply. He identifies the key lessons the market can take from the events of the year, and looks at both the headwinds and tailwinds in place for loan investors looking into 2023.

#CLO, #leveragedloan, #MidOcean

In this episode of The Last Tranche, Deborah Cohen Malka, partner and portfolio manager at AlbaCore Capital Group, discusses the performance and challenges facing the European CLO market.

Cohen Malka says that assets and liabilities in European CLOs are in a delicate balance, where the pricing of a single new issue CLO raises loan prices to the extent that other new CLOs become uneconomic.

She also speaks to the impact of Russia's invasion of Ukraine on credit markets, and how the energy crisis is impacting credit quality. Cohen Malka also explains the sovereign debt crisis in the United Kingdom, and says the episode provided an opportunity for investors to take advantage of pension funds forced selling of CLO triple A notes.

#CLO, #Creditflux, #AlbaCore

In this episode of The Last Tranche, Bain Capital Credit managing director John Wright discusses the manager landscape in the CLO market.

Wright talks about the importance of a CLO manager's role in the performance of the asset class. Whether a manager is a small or large firm, whether a manager has a captive equity fund or syndicates, or whether a manager has an aggressive or conservative investment strategy, will impact the outlook of any individual CLO.

Wright also discusses the recent trend of consolidation in the CLO manager base, and argues that we're likely to see more buyouts in the near-term while longer term new managers are likely to continue to emerge.

CLO, Creditflux, The Last Tranche

In this episode of the Last Tranche, Mike Nechamkin, chief investment officer and senior portfolio manager at Octagon Credit Investors, discusses the reasons behind the recovery in loan prices in recent weeks.

He says that there has been a fair amount of dispersion in US loans. Although the US loan index was down 400 basis points at the end of June, smaller borrowers (loans of less than $500 million) outperformed, dropping about 300bp compared to roughly 540bp for the largest loan issuers.

CLO managers seeking to print and sprint were able to pick up some of these larger loans (which had dropped only because they were the most liquid) at attractive levels. Print and sprint, says Nechamkin, is no longer a niche strategy as it was several years ago. A few managers employed this tactic in 2020 and its use has been more widespread this year.

Nechamkin says the market is still pricing in risk and managers are still defensive in their investing, but both the technical and fundamental picture has improved over the last month.

In this episode of the Last Tranche, Trey Parker, co-founder and chief investment officer at Sycamore Tree Capital Partners, discusses the optimal way for a CLO manager to invest through an economic downturn

#CLO, #Creditflux

#TheLastTranche, #Creditflux, #CLO, #LeveragedLoan, #CVCCreditPartners

#CLO, #leveragedloan, #newmountaincapital

Torben Skødeberg, CFA, Jim Wiant, #CLOs #ESG, #structuredcredit #leveragedloans

CLO, Leveragedloans, Bardin Hill Investment Partners