Opening panel: The CLO outlook – focusing on European perspectives
The last 18 months proved a challenging backdrop for CLO issuance. Rapid rate hikes and global economic turbulence have made the arbitrage tough. Europe has witnessed a dip in loan issuance prompting investors to seek new ways to attain yield. With reduced M&A activity and ongoing risks in capital flow and supply chains, CLO managers must strategize to safeguard returns. Despite all these headwinds the European CLO market kept up a reasonable pace of issuance across 2023. Looking ahead the market is at a tipping point for transformation. This panel will review:
- How have European CLO managers and investors adapted their approach to cope with the challenging environment of swift rate increases and macro-economic turbulence on CLO issuance and investment strategies?
- How can managers and investors mitigate risks and identify opportunities within the CLO market? What will the impact of Basel III be on CLO investments and capital adequacy, leverage and risk-weighted assets?
- What alternative approaches are managers adopting to improve CLO arbitrage? Will CLO issuance return to higher levels in Europe?
- What is the potential impact of the upcoming maturity wall on the CLO market? What forward-looking strategies can panellists share to proactively navigate the transition?
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