Over 70 participants and BNP Paribas clients from banks, securities, asset management and insurance companies gathered in central Tokyo to benefit from the insights and views of seasoned practitioners and CLO experts.
BNP Paribas ran a series of interactive discussions featuring CLO managers from the US and Europe as panellists. They covered a range of topics, including updates on the US and European leveraged loan market, trends in the US CLO market, perspectives from CLO equity investors, and the latest developments in private credit markets.
Some of the key takeaways include:
US leveraged and Loan markets updates | Perspectives from CLO equity investors
Conditions for new CLO formation, which supports over two-thirds of the leveraged loan asset class across both primary and secondary markets, remain favourable – namely, the “CLO equity arbitrage.” Despite elevated downgrade and default activity, technicals in the performing loan market have benefitted from this ongoing CLO creation.
US CLO markets outlook | Private credit markets update
BNP Paribas is seeing strong CLO demand globally with continued interest from clients in Japan. CLOs are a mature product with a proven track record that have performed well across multiple market cycles. Going forward it anticipates that whatever broader market fluctuations occur, it expects to see continued demand for CLOs and that they will remain a popular choice for investors. Looking ahead to 2025, the high new issue and reset volumes from 2024 are expected to continue, with AAAs likely to tighten further, driven by more demand, as CLOs have performed well and remain cheap from a relative value perspective.
European leveraged Loan and CLO markets update
The European CLO market is experiencing positive growth, driven by an increase in loan issuance. As a result, the CLO arbitrage is becoming more attractive, drawing in investors and supporting the creation of new CLOs.
CLO managers are well positioned to navigate credit fundamentals and technical considerations, allowing them to identify opportunities and optimise their portfolios through active management strategies.
According to Adnan Zuberi, Global Head of CLOs, Co-Head of Global Capital Markets Americas at BNP Paribas: “We were delighted to present an impressive line-up of leading global CLO managers, who shared their views on the market landscape and the outlook for leveraged loans, structured credit, and issuance trends. This allowed investors to gain a deeper understanding of the complex dynamics shaping the global CLO sector.
“Japanese clients are a key part of our Global CLO franchise, and this conference reinforces our continued commitment to the region.”
Investors gained a deeper understanding of the complex dynamics shaping the global CLO market.
Adnan Zuberi, Global Head of CLOs, Co-Head of Global Capital Markets Americas, BNP Paribas
The CLO Forum received positive feedback from investors. BNP Paribas’ goal was to deliver a unique and informative event that showcased the collective expertise of its Research, Origination, Syndication, Structuring, and Sales teams, to deliver top class content.
BNP Paribas was recognised as CLO Bank of the Year and won CLO Deal of the Year by GlobalCapital in its US Securitization Awards 2024, as well as CLO Deal of the Year by GlobalCapital’s European Securitization Awards 2024.
According to Susumu Ishikawa, Head of Credit Sales, Global Markets Japan at BNP Paribas: “The Bank’s significant presence and reputation across key locations around the globe enables us to effectively tap into a diverse and broad investor base, and successfully lead the syndication of CLO transactions.”
The Bank’s significant presence around the globe enables us to successfully lead the syndication of CLO transactions.
Susumu Ishikawa, Head of Credit Sales, Global Markets Japan, BNP Paribas
