Scuttlebutt from Carlsbad

We were pleased with the activity level at the CLO Summit in Carlsbad. Lots of scuttlebutt and market color. We came across several originated loan situations that were interesting, and these suggest that there will be continued innovation in CLOs going forward (call for details). Not all loan markets have been intermediated by securitization yet.

In benchmark CLOs there seemed to be consensus on a variety of fronts.  AAAs are cheap, and we need more participants in that part of the stack. The economy is in late innings or even extra innings. However, analysts do not expect a hard landing.  But the areas of concern are Energy and Pharma. Risk retention vehicles will gain more traction. Volumes of issuance next year will be similar to this year, with risk to the upside (hope springs eternal!).

Happy to chat about this or other topics. Let us know what you are working on; maybe we can help….