European CLO Volumes Set For Post-Crisis Record

The sales of European CLOs are running at their highest level in nearly 10 years, with activity resilient even as managers compete to buy the loans backing the CLOs, according to a recent Financial Times article.

The first three quarters of 2017 have generated €12.4 billion ($14.6 billion) of fresh CLO issuance, according to data from Bank of America Merrill Lynch, not including refinancing transactions. This marks the largest volume the European market has seen since activity restarted in 2013, the Financial Times explains, following a multiple year hiatus after the financial crisis.

"There's a lot of institutional demand for leveraged loans right now, which isn't surprising when you look at the cost of holding cash in euros," said Jonathan Bowers, Partner at CVC Credit Partners. "It's a low-volatility asset class and even if you're only getting 3.5 to 3.75 percent, that’s better than negative 50 basis points."

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