We began our visit to Tokyo this week attending S&P’s Structure Finance Seminar 2025. Along with almost 200 Japanese bankers and investors, we heard senior ratings analysts and leading CLO market participants discuss trends and outlooks for global leveraged finance, CLOs and other securitized strategies. Our panel was entitled, “Private Credit, Middle Market CLOs and Fund Finance.” Here’s a summary of the discussion, with additional color.
Private credit CLOs have seen a natural evolution. They began as balance sheet financing tools for specialty finance companies. Now they provide attractive financing within a levered fund, typically as replacement for asset-based facilities.
While CLO technology has been around since the late 1990s, the structures and market have evolved considerably. Just ten years ago, the private credit CLO market was less than $20 billion. With fewer than ten transactions done annually, it was only 5% of the overall CLO landscape...
“If investors want a floating-rate product, loans and CLOs are the easiest and most secure places to buy that.” – Wynne Comer, chief operating officer, AGL
Featuring Charts
Chart of the Week: Collateralized Loan Observations
Since the Fed began its rate hike regime in March 2022, MM CLO activity has grown. Source: PitchBook
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Chart of the Week: Poised for a Rebound?
Since the early 1800’s, tariff’s share of US government revenues has shrunk dramatically. Source: The Cato Institute
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Chart of the Week: What is a Tariff, Anyway?
Google searches for “tariff” hit a peak around Liberation Day but have trailed off since. Source: Google Trends
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Chart of the Week: Down Decade
Malaysia’s investment growth lags other ASEAN countries but shows signs of recovery. Source: Department of Statistics, Malaysia. Haver and respective national authorities
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Chart of the Week: Ringgit in the New Year
Malaysia’s economy grew 5.1% last year, ahead of 2023; 2025 is tariff-dependent. Source: Department of Economics, Malaysia
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Chart of the Week: Middle Market Breakdown
Despite other views, the middle market has three parts, each with their own features. Source: Churchill Asset Management
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Bloomberg: Leveraged Lending Insights – 5/19/2025
Leveraged loans claw back tariff-driven losses in secondary market It has been a wild ride in the secondary market this year to date, driven by bouts of volatility due to uncertainty over US economic policy. Secondary market bids on US leveraged loans started the year at an average of 97.33 before sliding 329 bps from…
Leveraged Loan Insight & Analysis – 5/19/2025
US$1.4bn of BDC loans were added to non-accrual status in 1Q25 A total of US$1.4bn of BDC loans were added to non-accrual status in 1Q25, up from roughly US$1.2bn in the prior quarter…. Subscribe to Read MoreAlready a member? Log in here...
The Pulse of Private Equity – 5/19/2025
PE AUM ($T) forecast* Download PitchBook’s Report here. Within PE subcategories, we expect buyout funds to continue to garner the bulk of fundraising in the coming years, but growth funds have seen increasing LP interest and offer an alternative to the VC asset class…. Subscribe to Read MoreAlready a member? Log in here...
Middle Market & Private Credit – 5/19/2025
Fitch’s Privately Monitored Middle Market Portfolio Overview, 1Q25 Click here to learn more. As audits for privately monitored rating (PMR) issuers continue to roll in, Fitch forecasts revenue growth of 5.7% for 2024. Revenue growth for 2025 is likely to be pressured by rising U.S. tariffs and retaliatory measures. … Subscribe to Read MoreAlready a member?
PDI Picks – 5/19/2025
Can the asset class again prove its resilience? Delegates at the recent Europe Summit heard views on how different parts of the market will weather the challenges. Our recent Private Debt Investor Europe Summit drew LPs, GPs and advisers from all corners of the globe, keen to discuss a rapidly changing environment and what they…
Middle Market Deal Terms at a Glance
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