content

Loan fund inflow streak snapped at 95 weeks

For the first time since June 2013 retail-cash outflows were logged from bank loan mutual funds and exchange-traded funds as $249 million was pulled in the week ended April 16, according to Lipper.

To be sure, the outflow was not unexpected and inflows over the previous four weeks had dwindled steadily to just positive $48 million last week, a 75-week low. For the record, as outflows go, this week’s was also the largest since October 2011.

With this result the four-week trailing average slumps to positive $46 million, from positive $190 million last week, and $321 million in the week prior. Of this week’s total outflow, 9% was tied to the ETF segment.

The streak of retail cash inflows into loan funds ran 95 weeks, for a total of $66.7 billion over that span, by the weekly reporters only.

Year-to-date inflows total $6.7 billion, of which $1.06 billion is ETF-related, or 16% of the sum. In the comparable year-ago period, inflows were $14.1 billion, with 12% tied to ETFs.

The change due to market conditions was negative $190 million. Total assets stood at $109.1 billion at the end of the observation period, with ETFs comprising $8.4 billion of the total, or approximately 8%. – Jon Hemingway

LL4.16-650

content

Small loan fund inflow keeps inflow streak going at 95 weeks

Retail-cash inflows to bank loan mutual funds and exchange-traded funds totaled $48 million for the week ended April 9, according to Lipper. Of the total, just 7% was tied to the ETF segment.

loan_flow_4.10_650

This is the lowest weekly total of the year, and it’s down from $127 million last week and $257 million two weeks ago. Retail-cash flows to the asset class have settled into a lower range following a hot start to 2014 as there hasn’t been a single weekly total above $700 million since January. Moreover, this is the lowest one-week reading dating back 75 weeks, to the week ended Oct. 31, 2012.

The four-week trailing average dipped to $190 million, from $321 million last week and $379 million two weeks ago. Still, the net inflow streak is now at 95 weeks, with a total of $66.7 billion over that span, by the weekly reporters only.

Year-to-date inflows total $7 billion, of which $1.08 billion is ETF-related, or 16% of the sum. In the comparable year-ago period, inflows were $15.1 billion, with 11% tied to ETFs.

The change due to market conditions was negative $77 million. Total assets stood at $109.6 billion at the end of the observation period, with ETFs comprising $8.4 billion of the total, or approximately 8%. – Joy Ferguson

content

US loan funds see smallest cash inflow since Nov. 2012, $127M

loan fund flows 4.2.14

Retail-cash inflows to bank loan mutual funds and exchange-traded funds totaled $127 million for the week ended April 2, according to Lipper. Of the total, roughly 24% was tied to the ETF segment.

This is the lowest weekly total of the year, and it’s down from $257 million last week and $327 million two weeks ago. Retail-cash flows to the asset class have settled into a lower range following a hot start to 2014 as there hasn’t been a single weekly total above $700 million since January. Moreover, this is the lowest one-week reading dating back 73 weeks, to the week ended Nov. 7, 2012.

The four-week trailing average dipped to $321 million, from $379 million last week and $483 million two weeks ago. Still, the net inflow streak is now at 94 weeks, with a total of $66.6 billion over that span, by the weekly reporters only.

Year-to-date inflows total $6.9 billion, of which $1.08 billion is ETF-related, or 16% of the sum. In the comparable year-ago period, inflows were $14.1 billion, with 11% tied to ETFs.

The change due to market conditions was positive $241 million. Total assets stood at $107.2 billion at the end of the observation period, with ETFs comprising $8.4 billion of the total, or approximately 8%. – Joy Ferguson

content

CLO issuance hits $10.8B in March, most in “CLO 2.0″ era

In yet another sign of unrelenting institutional investor appetite in the leveraged loan space, CLO issuance in the U.S. totaled $10.8 billion in March, the highest monthly figure since May 2007, before the financial markets all but collapsed and structured finance – and certainly collateralized loan obligation vehicles – disappeared for several years, re-emerging in 2011.

These post-meltdown deals have been dubbed CLO 2.0 vehicles.

With the March activity CLO issuance so far in 2014 totals $22.3 billion. While a hefty amount, the first-quarter figure trails the $26.3 billion seen during the same period in 2013. For all of last year there was $82.6 billion in U.S. CLO issuance, a record, according to S&P Capital IQ/LCD.

The CLO market looks set to continue (on both sides of the Atlantic), at least in the near term. April’s pipeline of deals suggests a solid start to the quarter, although the combination of the looming Easter break and the IMN’s 3rd Annual Investors Conference on CLOs & Leveraged Loans in New York later in the month could interrupt issuance, says LCD’s Sarah Husband, who tracks the CLO market.

In terms of upcoming deals the U.S. has a number of transactions set to price soon, says Husband, including:

  • Pinnacle Park CLO ($408.26 million) via Wells Fargo
  • Capital Partners CLO 19 via Citi
  • CIFC Funding 2014-II CLO via RBS
  • Catamaran CLO 2014-1 via Citi

US CLO issuance

CLOs are special-purpose vehicles set up to hold and manage a pool of leveraged loans. You can read more about how CLOs work here.

The booming CLO market comes as cash continues to pour into the leveraged loan asset class. Indeed, U.S. loan funds last week saw their 93rd straight week of net inflows, totaling $66.5 billion, according to Lipper. The last outflow was mid-2012.

 

content

Leveraged loan fund inflows dwindle to $257M though streak hits 93 weeks

loan fund flows

Retail-cash inflows to bank loan mutual funds and exchange-traded funds totaled $257 million for the week ended March 26, according to Lipper. Of the total, roughly 3% was tied to the ETF segment.

This is the third-lowest weekly total of the year, and it’s down from $327 million last week and $574 million two weeks ago. Retail-cash flows to the asset class have settled into a lower range following a hot start to 2014. There has not been one week over $700 million since January.

The four-week trailing average dips to $379 million, from $483 million last week and $504 million two weeks ago. Still, the net inflow streak is now at 93 weeks, with a total of $66.5 billion over that span, by the weekly reporters only.

Year-to-date inflows total $6.8 billion, of which $1.05 billion is ETF-related, or 15% of the sum. In the comparable year-ago period inflows were $13.3 billion, with 11% tied to ETFs.

Last year’s full-year inflows totaled $52.3 billion, 10% of which was tied to ETFs.

The change due to market conditions was positive $26.1 million. Total assets stood at $109.2 billion at the end of the observation period, with ETFs comprising $8.4 billion of the total, or approximately 8%. - Joy Ferguson

content

Leveraged loan funds see 92nd straight week of cash inflows, totaling $66.3B

US leveraged loan fund flows

Retail-cash inflows to bank loan mutual funds and exchange-traded funds totaled $327 million for the week ended March 19, according to Lipper. Off the total, roughly 16% was tied to the ETF segment.

This is the third lowest weekly total of the year, and it’s down from $574 million last week and $358 million two weeks ago. Retail-cash flows to the asset class have settled into a lower range following a hot start to 2014 as there has not been one week over $700 million since January. The four-week trailing average dipped to $483 million, from $504 million last week and $510 million two weeks ago.

Still, the net inflow streak is now at 92 weeks, with a total of $66.3 billion over that span, by the weekly reporters only.

Year-to-date inflows total $6.5 billion, of which $1.04 billion is ETF-related, or 16% of the sum. In the comparable year-ago period, inflows were $12 billion, with 12% tied to ETFs.

Last year’s full-year inflows totaled $52.3 billion, 10% of which was tied to ETFs.

The change due to market conditions was negative $18.9 million. Total assets stood at $108.9 billion at the end of the observation period, with ETFs comprising $8.4 billion of the total, or approximately 8%. – Jon Hemingway

content

Feingold O’Keeffe prices $414M CLO via StormHarbour

StormHarbour Securities yesterday priced a $414 million CLO for Feingold O’Keeffe Capital.

The CLO is structured as follows:

The transaction is the second CLO arranged and placed by StormHarbour for Feingold O’Keeffe Capital, following the $512 million Longfellow Place CLO placed in January last year.

With Feingold’s deal, CLO issuance in the year to date rises to $19.61 billion across 38 deals, according to LCD. In March, 15 CLOs have priced totaling $8.12 billion. – Sarah Husband

content

U.S. CLO equity distribution levels decline in 2013′s second half, S&P says

Equity distributions for U.S. collateralized loan obligation (CLO) transactions have declined from the highs seen at the start of 2013, but they still offer positive returns, according to an article published on Friday by Standard & Poor’s Ratings Services. S&P believes this decrease resulted from a decline in leveraged loan spreads and LIBOR floor levels, and heightened loan repayment levels.

Most CLO 1.0 deals are outside their reinvestment periods, so cash from loan repayments was used to pay down the CLO liabilities, increasing the weighted average cost of funds for the CLOs. Combined with an overall decline in the spread and LIBOR floor levels of the assets, this resulted in a significant decline in equity distributions in the second half of 2013.

For CLO 2.0 transactions, the decline was not as dramatic. Because most CLO 2.0s are still in their reinvestment periods, these transactions reinvested the cash received from loan repayments last year – albeit at a lower spread and LIBOR floor level – and their cost of funds did not increase like that of CLO 1.0s.

As CLO 1.0s continue to amortize Standard & Poor’s expects their equity distributions to decline, though equity investors still have a final payment to look forward to if and when they decide to call the redemption option. The agency also expects some CLO 2.0 equity distributions to decline as they begin to pay down their notes, and expects those with lower equity yields to either be optionally redeemed or refinanced, leaving behind deals with healthier distributions.

S&P published the full article, “U.S. CLO Equity Distributions Decreased During The Second Half Of 2013, But Returns Are Still Positive,” on March 14, 2014. The report is available to RatingsDirect subscribers at www.globalcreditportal.com and www.spcapitaliq.com. If you are not a RatingsDirect subscriber, you can purchase a copy of the report by calling (1) 212-438-7280, or sending an e-mail to research_request@standardandpoors.com.

content

Leveraged loan fund inflow streak hits 91 weeks totaling $65.9B

US leveraged loan fund flows

Retail-cash inflows to bank loan mutual funds and exchange-traded funds totaled $574 million for the week ended March 12, according to Lipper. Of the total, roughly 41% was tied to the ETF segment.

This latest result is up from $359 million of inflows last week and keeps with the see-saw pattern that has developed over the past six weeks. The four-week trailing average held steady, at $504 million, from $511 million last week and $478 million in the week prior. The net inflow streak is at 91 weeks, with a total of $65.9 billion over that span, by the weekly reporters only. Year-to-date inflows total $6.2 billion, of which $990 million is ETF-related, or 16% of the sum.

In the comparable year-ago period, inflows were $10.5 billion, with 12% tied to ETFs. Last year’s full-year inflows totaled $52.3 billion, 10% of which was tied to ETFs. The change due to market conditions was positive $13 million, or essentially nil. Total assets stood at $108.6 billion at the end of the observation period, with ETFs comprising $8.3 billion of the total, or approximately 8%. – Matt Fuller

content

Leveraged loan funds see 90th straight cash inflow ($359M)

loan fund flows 3.6

Retail-cash inflows to bank loan mutual funds and exchange-traded funds totaled $359 million for the week ended March 5, according to Lipper. Of the total, roughly 35% was tied to the ETF segment, the highest share since August 2012.

This latest result is down from $673 million of inflows last week and keeps with the see-saw pattern that developed over the past six weeks. The four-week trailing average still rose this week, to $511 million, from $478 million last week and $425 million in the week prior.

The net inflow streak is now extended to 90 weeks, with a total of $65.4 billion over that span, by the weekly reporters only.

Year-to-date inflows total $5.6 billion, of which $755 million are ETF-related, or 13% of the sum. In the comparable year-ago period, inflows were $9.3 billion, also with 12% tied to ETFs.

Last year’s full-year inflows totaled $52.3 billion, 10% of which was tied to ETFs.

The change due to market conditions was positive $244 million, the largest since the first week of the year. Total assets stood at $105.7 billion at the end of the observation period, with ETFs comprising $8.1 billion of the total, or approximately 8%. – Jon Hemingway