June 17, 2015

Lisa Seidel: Yield-Deprived Investors Turn to CLO Market

Lisa Seidel

Speaking on the panel, Risk Retention and Alignment of Interests at the Global ABS 2015 conference in Barcelona today, Lisa Seidel, Vice President in BNY Mellon’s Corporate Trust team said: “Our outlook on the European CLO market is positive. We see that yield-deprived investors are continuing to look at the CLO issuance market and the wider illiquid asset market as an investment. We are cognisant of the fact that there is a significant correlation between loan spreads and CLO spreads, especially in Europe, where there is a less liquid syndicated loan primary market compared to the much deeper and more liquid US market. In particular we have seen a tightening of mezzanine spreads whilst AAA spreads seem to have remained untouched. So in the light of risk retention, when talking to clients, the feedback we receive is that there is an increase in expectation from the investor base for the entire market to become more regulatory compliant on both sides of the Atlantic, as this will lead to more liquidity.”

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Malcolm Borthwick
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