CLOs

Contenders see plenty of room for the market of EFTS investing in CLOs to grow. The question is if they can potentially usurp some of banks' dominance in AAA-tranche investing.

Regional banks may soon favor CLOs again while proposed rules could draw banks to the market long-term.

Resetting allows CLOs to essentially cut the costs at which they borrow, leaving more money for holders of the riskiest and highest-returning part of the structure, the equity portion, after other note holders have been paid.

Deal supply remains relatively strong in the sector, but new originations still face a scarcity of new assets to roll into the deals.

Citigroup and Bank of America have teamed up with five other banks to form Octaura Holdings, an electronic trading platform for syndicated loans and collateralized loan obligations.

Goldman Sachs Group and JPMorgan Chase are ditching safeguards on credit lines to CLO managers, to defend their market share as arrangers in the lucrative business.

Defaults have been milder than expected thanks to government relief and stricter underwriting. But with the crisis dragging on and policymakers unable to agree on a stimulus plan, loans to highly indebted companies remain at risk.

Morgan Stanley’s $7 billion purchase of Eaton Vance marks the latest wager that finding a big partner is critical to survival in the asset management industry.

The Charlotte, N.C., company recently closed on a sale of its Cohen Financial platform to SitusAMC.

An article in The Atlantic warning that collateralized loan obligations will be banks’ next downfall overestimates the risk of these securities.