CLO deal levels forecast; SC Lowy, UOB offer Asian-backed CLO; appetite ‘finally here’

By Cristal Cody

Eureka Springs, Ark., March 1 – U.S. CLO market participants remain mostly confident 2016 deal volume will hit the $45 billion area.

“We should get somewhere around $40 billion,” a market source said. “I don’t think it’s going to be more than $50 [billion].”

J.P. Morgan Securities LLC analysts dropped their fiscal 2016 CLO volume forecast by 40% to $35 billion to $45 billion.

BofA Merrill Lynch analysts lowered their annual supply forecast to $45 billion from $70 billion.

Elsewhere, the Asian CLO market is showing signs of life.

SC Lowy announced on Tuesday that the Hong Kong fixed income firm and UOB Asset Management Ltd. are marketing the first Asian-backed management cash flow CLO in the U.S. primary market over the week.

“The time and investor appetite is finally here for CLOs in Asia and we welcome this asset class to the region,” Jody Mariani, CLO trader and leading the business development for SC Lowy, said in a news release.

The offering will be marketed in Europe and Asia in the coming week.

UOB Asset Management and SC Lowy will co-manage the CLO.

Standard Chartered Bank, Resource Capital Markets and UOB Securities are the underwriters.

The CLO will be comprised predominantly of senior secured bank loans from Asia Pacific issuers.

UOB Asset Management is a Singapore-based asset management group.

© 2015 Prospect News.
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