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The first half of 2024 kept us busy tracking volume in the newly energized BSL market. Remarkable, but not unexpected, was its ability with fresh capital to refinance higher-cost existing deals away from the direct lenders.

Left unexplained more fully was the driver of this activity. This special series explores how collateralized loan obligations (CLOs) are propelling both BSL and direct lending activity to record levels. To bring an expert’s perspective, we spoke with Kelli Marti, our head of CLO management.

We asked Kelli to give us a sense of the numbers. “Year-to-date volume of freshly minted CLO vehicles is almost $105 billion, according to PitchBook LCD,” Kelli told us. “That’s across 221 transactions – way ahead of last year’s $56 billion from 129 deals. Including resets and refinancings, a growing trend, that adds about $120 billion across 272 transactions.”...

With the Goldilocks economic outlook coming to the forefront, investors are feeling a little bit more safe in the loan market.” – John Lloyd, portfolio manager, Janus Henderson Investors. 

Featuring Charts

Chart of the Week: Security Issues

July 17, 2024

The prospect of lower interest rates has boosted new CLO issuance at a record pace. Source: CreditFlux(Past performance is no guarantee of future results.)

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Chart of the Week: The Pendulum Always Swings

July 9, 2024

Refinancings by direct lenders returned last quarter to outweigh BSL takeouts. Source: PitchBook LCD, data through June 30, 2024(Past performance is no guarantee of future results.)

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Chart of the Week: Lower Risk, Higher Yield

July 2, 2024

Among a basket of traded credit strategies, leveraged loans are showing well. Source: The Daily Shot(Past performance is no guarantee of future results.)

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Chart of the Week: Feeling and Dealing

June 26, 2024

Consumers gloomy, but keep pushing stock prices higher. Source: Bloomberg, The Conference Board(Past performance is no guarantee of future results.)

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Chart of the Week: Be Direct

June 20, 2024

Private capital fundraising for the first quarter was predominantly for direct lending. Source: Preqin Pro(Past performance is no guarantee of future results.)

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Chart of the Week: Steady as She Goes

June 11, 2024

Middle market direct lending spreads per unit of leverage consistently higher than large caps. Source: LSEG LPC(Past performance is no guarantee of future results.)

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Features

Leveraged Loan Insight & Analysis – 7/15/2024

1H24 New-issue CLO volume sets new record for first six months at over US$99.5bn Over US$99.5bn of new US CLO issuance has been completed through the end of June 2024, an increase of over 77% compared to the same time last year and a 23% gain compared to the prior record half year total of…

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Private Debt Intelligence – 7/15/2024

Family office investors favor private debt Read more in Preqin’s Insights+ Research Note: Private wealth’s path into US private debt Family offices, which make up over a third of the private wealth entities, are showing a clear appetite for private debt strategies…. Login to Read More...

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Middle Market & Private Credit – 7/15/2024

PMRs Stay Longer in ‘CCC’ Category Click here to learn more. PMR issuers within the ‘CCC’ category have a lower average annual upgrade rate, lower average annual default rate and a higher average annual stability rate than publicly rated peers. Different stakeholder dynamics within the direct lending segment play a role in the lower number…

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PDI Picks – 7/15/2024

Infrastructure in the spotlight It’s an area of alternative assets that has retained its popularity with LPs despite the challenges experienced by fundraisers lately. Last year was notoriously tough on the fundraising trail for alternative asset classes but infrastructure debt managed to buck the trend, with affiliate title Infrastructure Investor’s Debt 30 ranking recording a…

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Leveraged Loan Insight & Analysis – 7/8/2024

1H24 Sponsored loan volume tops US$400bn, exceeding full year 2023 results PE sponsors tapped the loan market for a record US$227bn in 2Q24, pushing sponsored issuance for the first six months of the year to over US$400bn…. Login to Read More...

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