What Could Tighten CLO Spreads from Here?

Aleem Akhtar and Anusha Singh analyse the near-term catalysts for CLO spread tightening. Key technicals discussed include approximately 33 billion of paper exiting reinvestment periods in 2026, rising investor cash repayments being recycled into the market, sustained Japanese bank demand despite rising domestic rates, and the depth of a global investor base spanning Scandinavia, the Middle East, and Asia. Both speakers note that a resolution of the Iran conflict could be a near-term trigger, while emphasising that portfolio construction and manager quality are increasingly driving investor decisions.