Asset-Backed Securities

With private equity firms active buyers of CLOs and CMBS in recent weeks, Aza Teeuwen explains why these investors are shunning physical assets in favour of asset-backed bonds.

With the higher rated tranches of euro CLOs popular with UK pension funds, Aza Teeuwen looks at how the market coped with heavy selling in recent days and notes investment grade CLO bonds are now yielding close to 10%.

With UK banks pulling mortgages from the market, Douglas Charleston explains why this doesn’t reflect any fundamental weakness in the UK banking sector, but rather the uncertainty created by the sharp moves in UK rates.

Demand for floating rate assets has driven a strong reopening of the European ABS primary market, and is drawing new investors to the asset class, says Kevin Law.

European ABS issuers largely held off on printing new deals in Q2 as broader market volatility saw spreads widen, but we are already seeing more investor-friendly structures and many favoured names are likely to bring deals offering markedly higher yields when activity picks up again.

With yields on B rated CLO bonds now as high as 18%, Elena Rinaldi looks at various scenarios for corporate default rates and questions why investors are overshooting even the most pessimistic scenarios.

European ABS and CLOs had a turbulent Q2 as broader macro headwinds sparked heavy selling, but investors have made good use of direct trading to pick up bonds at prices not seen since Europe’s sovereign debt crisis.

Aza Teeuwen explains how market moves have impacted BB CLOs and looks at historic trends analysing their behaviour during crisis scenarios.

After two COVID-hit years last week the European ABS market decamped once again to Barcelona for the 26th annual AFME & IMN Global ABS conference.

In fast-moving markets there is no perfect time to provide an update on valuations.

Inflation rates have been rising for over a year now. While the increasing levels may eventually moderate, inflation is still likely to be with us for some time, especially with the Russian invasion of Ukraine exacerbating post-Covid supply constraints.

We can debate whether the European Central Bank is behind the curve or not, but Christine Lagarde says rates will be in non-negative territory by September.