Fitch: Final Risk Retention Rules Cloud a Record Year for New U.S. CLOs

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

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=800870

Issuance of new U.S. CLOs padded their already highest annual numbers last quarter, though a cloud hangs over the sector in the form of final risk retention rules announced earlier this month, according to Fitch Ratings in its latest Global CLO Market Quarterly.

Fitch reports 55 U.S. CLOs totaling $30.7 billion coming to market in third quarter-2014 (3Q'14). That brings the total through 3Q'14 to $88.3 billion from 160 CLOs, which surpasses $80.2 billion issued for all of 2013. The brisk pace will likely continue, according to Senior Director Derek Miller. 'Issuers will accelerate CLO issuance before the final risk retention rules take effect to the extent that investor appetite permits, which makes $100 billion for the year quite a realistic milestone,' said Miller.

New managers are also continuing to emerge with their first post crisis U.S. CLOs in the U.S. In fact, three of the 49 managers that issued CLOs in 3Q'14 were new issuers and 10 had only issued one post crisis CLO. That dynamic is likely to change, however, once the risk retention rules take hold. 'Smaller CLO managers will likely wind up on the sidelines as the sector becomes concentrated with select, larger names dominating the new issue space,' said Miller.

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

Contacts

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