Welcome to our latest Appleby report which provides data, insight and analysis on the global Collateralised Loan Obligation (CLO) market.
This CLO report principally focuses on US CLO deals activity during the last six months of 2014, and reflects how this compares and contrasts with previous periods. During this time 121 deals priced, bringing the 2014 total to 237, collectively worth USD123.8bn. This represents the largest year on record for CLO issuance.
There are a number of other key themes that emerge from the statistics:
- There was USD61.8bn of issuance in the last six months of 2014, a similar value of deals priced in the first six months of 2014 (USD62m).
- Average deal size was USD511m, slightly lower than the first half of 2014. For the year as a whole the average deal size was USD523m, 10% higher than the equivalent figure for 2013.
- The top ten deals by value for the second half of the year represented 14% of the value for all deals for the period. Average deal size for this group was USD897m.
- The average AAA spread for deals closed between July and December 2014 was 151bp, compared to 149bp for the first half. The average for the full year was 150bp compared to 133bp for 2013.
- A core set of Arrangers continue to dominate the CLO market, with Citigroup leading the ranking for the year pricing 34 deals valued at USD18bn.
- Five Managers managed five issuances during the year, and a further four Managers issued four deals.
We do hope that you find our analysis on the following pages useful. 2014 has been the biggest year for issuance ever, reaching the USD124bn mark. As we close the year, the final Risk Retention Rules were published by the Federal Reserve giving CLO Managers two years to comply. These changes will affect the market, and will make it harder for some smaller Managers to get deals away. This will result in consolidation within the sector, and we have seen the first examples of this occuring, amongst our clients, with some very positive results.
You can download the Appleby Report on the CLO Market for July - December 2014 here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
