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LMA Survey: European CLO issuance likely €10-15B in 2015

The LMA today released the results of its survey on the outlook for the syndicated loan market over the next 12 months. A summary of the key points follows, and the survey can be found here.

Competitive pressure in the market, and global geopolitical and/or economic risks, are the top-two respectively when it comes to factors people think will most influence the syndicated loan market over the next 12 months, according to the survey, while corporate M&A, followed by refinancings, are likely to present the best opportunities over the same timeframe.

As for syndicate loan volume expectations, just under half those surveyed believe there will be an up to 10% increase in volume, and 42% think it will be unchanged. Meanwhile, 47% forecast CLO issuance volumes will be in the €10-15 billion range.

Looking back at this year, increased investor appetite is identified as the greatest influence on secondary market liquidity, according to the poll. Sticking with secondary, 45% of respondents expect buyside appetite will not be matched by primary supply, and that liquidity will be deal-specific next year.

When it comes to the main barrier to developing market lending at the present time, the LMA found a close split between those citing legal uncertainty and inconsistent regional integration, while the primary factor driving developing market investment is widely seen to be the search for yield.

The survey garnered a disparity of views on where the property cycle is in Europe, while it found debt funds are likely to demonstrate the greatest growth in real-estate lending in 2015. – Staff Reports

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CLO roundup: Pricing schedule stays busy as European spreads widen

CLO roundup 2014-11-10 chart 3

Last week was an active one for the U.S. as market players looked to price CLO transactions ahead of the shortened Thanksgiving week. In Europe, meanwhile, November saw its first two pricings last week ahead of what could be a busy push into year-end. The big question, however, is whether widening liability spreads in Europe will lead some issuers to put transactions on hold until 2015.

Global issuance stands at $130.77 billion, according to LCD.

LCD subscribers can click here for full story, analysis, and the following charts:

  • Deal pipeline
  • US arbitrage CLO issuance and institutional loan volume
  • European arbitrage CLO issuance and institutional loan volume

– Sarah Husband

Follow Sarah on Twitter for the latest CLO market news and insight.