From growing credit risks to the surge in secondary trading there's plenty to discuss in the CLO market, and we bring together five of the market's most influential leaders to do just that. We'll be asking them to kick-off the discussion for the rest of the day with topics like manager consolidation and where we are on libor replacement language.
Dispatches from the CLO trenches
Two of the top lawyers in the market sit down with Creditflux to discuss what they’ve been seeing recently. What new features are making it to the table, and what are investors pushing back on in the docs this month?
Panel: CLO 4.0
The proposed updates to Volcker look like they will rewrite the rules for US CLOs, and usher in a new era of CLO 4.0. Many questions remain though, including what exactly managers will do with their increased flexibility (and how senior investors will react), how easy it will be to amend existing deals to add in a bond bucket, and whether springing bond-buckets will now trigger.
Panel: Staying flexible
Vanilla CLOs are so 2019, all the cool kids (and their bankers) are looking at bond-flex CLOs now. This masterclass will provide an update on who’s active in the space, the current features of bond-flex deals, performance so far, and the risks and relative value of bond-flex and vanilla CLOs. Also up for discussion for be the other flex structure – triple C-flex CLOs. They haven’t been as popular recently, but as the global economy slows and idiosyncratic risk grows could there be a brighter future for deals designed to take advantage of stressed assets?
Panel: Mid-market goes global
From a niche to a staple, middle-market CLOs have had a remarkable run in the US, and are now appearing in Europe as well. How is investor demand looking this year? As the cycle begins to turn, how do credit risks in the underlying middle-market loans compare to their broadly-syndicated brethren? And given the structural differences in a middle market CLO, what does a manager need to do to now to prepare for a downturn?
Panel: Allocating to CLOs
Despite many years of outperformance structured credit continues to be a niche choice for many LPs. Our panel of expert allocators will talk us through how structured credit in general, and CLOs in particular, fits into their portfolios. How do they deal with the complexities of the asset class? Do they target particular products like CLOs, or prefer a broader structured credit mandate, and how do they deal with Europe vs the US? How do they approach manager selection? How do they get boards comfortable with acronyms? And what will it take to move CLOs out of alternative assets into general fixed income buckets?
Presentation: Academic angle
Panel: Making ESG work for the CLO market
The use of ESG criteria in making investment decisions has moved from a niche concern to a mainstream issue with astonishing speed in Europe and is a growing topic in the US as well. But there are many still unsolved challenges for fixed income investors and managers, particularly around ESG reporting and market standards, and those issues are compounded for CLOs. How important is ESG for CLO investors, what are the practical challenges for managers looking to comply and what steps is the industry taking to fix this?
Panel: Assessing ESMA
If you ask European managers and investors what topic comes up most at meetings it isn’t credit risk or even relative value, it’s ESMA reporting. US managers also need to pay attention if they want to sell to European investors. So where are we on ESMA? Is there an industry consensus on what a CLO manager needs to report? What are the financial implications for managers who get this wrong? And is this a topic that CLO investors need to worry about as well?
Would you buy it?
Four top CLO investors walk us through their investment process as they consider four CLO investment case studies in this now traditional end to the CLO Symposium. What are the key questions that every CLO investor should ask before they buy?
(Separate ticket required)
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