MidOcean Credit markets $368 million CLO refinancing; weakening loan quality poses CLO risks

By Cristal Cody

Tupelo, Miss., April 30 – MidOcean Credit Fund Management LP is offering $368 million of notes in a refinancing of a 2016 broadly syndicated CLO.

Year to date, more than $10 billion of CLOs have been refinanced, reissued or reset, according to market sources.

In other action, Moody’s Investors Service said in a report released on Tuesday that weakening leveraged loan credit quality, among other factors, were among the key topics at a structured finance conference Moody’s held in Tokyo on April 4.

“Our view is that U.S. CLOs face a number of growing risks, particularly stemming from weakening credit quality in the leveraged loan market and, to a lesser extent, loosening CLO covenant and deal documentation provisions,” Moody’s said. “Our interactions with investors at the conference indicated that some of them share similar concerns.”

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