CLO activity hits record in Europe

A rush to catch up on a year of missed refinancing activity has led to record volumes in Europe’s market for collateralized loan obligations in the first two months of the year.

Just over 12 billion euros ($14.6 billion) of new issue, refi and reset paper has priced so far this year, surpassing a previous high of 7.3 billion euros in the first two months of 2018, with refinancings driving the heightened deal flow. For comparison, the largest total supply was in 2018, when overall volumes reached 45 billion euros over the year, according to Citi research.

CLO debt spreads have fallen faster and further than most expected, prompting more managers to try and improve the performance of their deals by reducing costs, updating transaction tests and language, and extending reinvestment periods through refinancing exercises.

Volta Finance Limited (LON:VTA) is a closed-ended limited liability company registered in Guernsey. Volta’s investment objectives are to seek to preserve capital across the credit cycle and to provide a stable stream of income to its Shareholders through dividends that it expects to distribute on a quarterly basis.

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