CLO NEWSLETTER - Sutherland Global Services

It’s a demand world: Loan market technicals favor issuers in April
May 10, 2013; Source: LeveragedLoan.com
In April, demand for loans again outpaced supply, adding further fuel to
the market’s technical fire, which has led to plunging yields on new-issue
loans (among other things).
All told, visible capital – including estimated retail inflows and CLO
formation – exceeded net new supply during the month by $7.8 billion:
$10.4 billion to $2.6 billion. That padded the year-to-date surplus to a
super-sized $37.8 billion ($51.7 billion to $13.9 billion), or a stillformidable
$28.3 billion including Heinz’s allocated but yet-to-be-funded
$9.5 billion institutional LBO loan.
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Investors stay luke warm on move from CLO 1.0 to CLO 2.0
May 09, 2013; Source: Creditflux.com
Over 500 CLO professionals were packed into London’s Landmark Hotel for Creditflux’s CLO symposium this week and one of their
first tasks was to offer their opinion on the progression from CLO 1.0 to 2.0.
Results suggested that a large number of industry professionals remain sceptical of the benefits of newer CLO structures. When
quizzed on whether CLO 2.0 is a great improvement on CLO 1.0, almost a third of delegates disagreed with the notion (see below
for full results).
A quarter of the audience disagreed slightly with the statement but another 5% took a more hardened stance and disagreed
strongly.
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3i Group Said to Join Ares Management in European CLO Deal Surge
May 08, 2013; Source: Businessweek.com
3i Group Plc (III) and Ares Management LLC are planning to join the surge in issuance of European collateralized loan obligations,
according to people with knowledge of the matter.
3i Debt Management, the credit unit of the London-based private-equity company, is raising a CLO of about 300 million euros ($395
million), said three people with knowledge of the matter, who asked not to be identified because the deals are private. Ares is also
seeking a CLO of about 300 million euros, three people familiar with that transaction said.
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Amid flood of investor cash, leveraged loan yields hit lowest point in
decade
May 08, 2013; Source: LeveragedLoan.com
As the U.S. leveraged loan market continues to see a steady stream of
investor cash inflow, yields on new-issue leveraged loans have reach their
lowest point since before the 2008 market meltdown. Indeed, yields (to
maturity) on double-B rated new issues neared 3% at the end of April while
single-B loans were yielding roughly 5%.
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