Fitch: Credit Cushion Ample for New U.S. CLOs as Issuance Remains Brisk

CHICAGO--()--Link to Fitch Ratings' Report: Global CLO Market Trends

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=746637

With 2014 off to a strong start for new U.S. CLO issuance, a notable constant with these new deals has been still-strong credit enhancement, according to Fitch Ratings in its latest quarterly newsletter.

Fitch reports 40 U.S. CLOs totaling $20.6 came to market in first quarter-2014 (1Q'14). Credit enhancement for senior notes in these CLOs has remained stable at 37.7%, compared to 37.9% in 4Q'13. In fact, 'protection on U.S. senior CLO notes appears to have stabilized within a relatively tight band since the second quarter of last year,' said Derek Miller. This follows a period of steady increases in credit enhancement for CLO credit enhancement following an average low of 34.9% in 1Q'12.

Elsewhere, further clarification of the Volcker Rule led to CLOs coming to market last quarter with provisions for springing bond buckets, a trend Miller says is likely to continue for the foreseeable future.

Fitch's latest 'CLO Market Quarterly' newsletter is available at 'www.fitchratings.com' or by clicking on the above link.

Additional information is available at 'www.fitchratings.com'.

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Contacts

Fitch Ratings
Derek Miller, +1 312-368-2076
Senior Director
Fitch Ratings, 70 West Madison Street, Chicago, IL 60602
or
Kevin Kendra, +1 212-908-0760
Managing Director
or
Matthias Neugebauer, +44 20 3530 1099
Managing Director
or
Galen Moloney, +44 20 3530 1561
Senior Director
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

Sharing

Contacts

Fitch Ratings
Derek Miller, +1 312-368-2076
Senior Director
Fitch Ratings, 70 West Madison Street, Chicago, IL 60602
or
Kevin Kendra, +1 212-908-0760
Managing Director
or
Matthias Neugebauer, +44 20 3530 1099
Managing Director
or
Galen Moloney, +44 20 3530 1561
Senior Director
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com