CLO market thrives as investors seek transparency


The total value of US-based collateralised loan obligations priced in the first half of 2014 was at its highest level in recent years, surpassing the total for the last half of 2013 by $22 billion, according to Appleby.

The 119 deals priced in the first half of the year represented a total value of $63.2 billion, according to Appleby’s latest CLO Insider report focused on the first six months of 2014.

“The first half of 2014 not only marked the biggest dollar amount in terms of CLOs priced since the market started picking up in 2010, but the average deal size is well above previous six month periods in recent years,” said Julian Black, Cayman-based partner and global head of structured finance at Appleby.

“Investors continue to recognise that CLOs are unlike ABS CDOs in that they are diversified, have strong performance history and a reassuring level of transparency and oversight by third parties.”

At $531 million, the average deal size was up 14 percent over the second half of 2013 and 12 percent when compared to the average of the full year of 2013. Meanwhile, total value of CLOs priced in the first half of the year was up 53 percent when compared to the last half of 2013.

“We see robust issuance for CLOs going forward; the market is flourishing and our pipeline is well-fuelled to the end of 2014 and beyond,” said George Bashforth, head of directorship services, Appleby Trust (Cayman). “Our CLO forecast remains strong, and we expect the full year to round-out at between the USD100-120 billion range.”

Appleby, George Bashforth, Julian Black, Cayman, US

Cayman Funds