“Cracks have appeared in the defenses of European collateralized loan obligations for the first time since the last financial crisis as portfolios buckle under the strain of the coronavirus pandemic.” – by Sarah Husband
CLOs
Leveraged loan downgrades continue threat to Europe’s CLO investor base (S&P Global)
“A credit rating downgrade wave of historical proportions is following in the wake of economic disruption caused by COVID-19.” – by David Cox
CLO market: Corporate distress? Bring it on (Euromoney)
“Ask any market participant where they think that the next crisis is coming from and their answer will almost always be corporate credit. We have been watching the market very closely and have seen degradation in investment grade. BBB is the new A.” – by Louise Bowman
A leveraged loan bust will hurt less than subprime mortgages (FT)
“Expect investors rather than banks to be hardest hit by the next meltdown” – Anthony Carter