Attendees expected leveraged loan CLOs to show the strongest growth next year, and also tipped synthetic CDOs and collateralised debt obligations of asset-backed securities for strong growth.
Moody’s expects investors to take further exposure to leveraged loan CLOs throughout 2007, following a record year last year (see Moody's: Basel II fuelling growth in collateralised debt) with strong demand coming from the US, driven by a desire for diversification.
In a report released last week, the rating agency said CLOs are being seen more as a financing tool rather than for purely arbitrage or risk transfer, due to the tight spreads available and their diverse investor base. Moody’s expects CLO managers will move towards active managing, as the market becomes more liquid and higher returns are sought.
The week on Risk.net, July 7-13, 2018Receive this by email