CLO resets arrive in Europe

摘要

Managers looking to capitalise on rapidly narrowing spreads are bringing CLO resets to Europe for the first time, but only a select few will be able to use this method to boost the economics of older trades. The European CLO market has seen a dramatic tightening in senior tranches this year, as big-ticket Japanese, European and US buyers have driven spreads inside 100bp - their tightest level since the financial crisis. Aside from triggering a wave of new issuance, the rally has also prompted CLO managers to revisit existing deals printed in 2013 and 2014, when levels were as wide as 145bp. A slew of CLOs have refinanced their upper tranches in the past few weeks, with at least another six slated to come to market.