CIFC, the largest U.S. CLO manager by number of deals, is raising its own capital to finance risk retention compliance.
The regulators' annual Shared National Credits review found nearly 10% of large, syndicated credits demonstrated some form of weakness, most of which were leveraged loans. But renewed concerns about energy loans also cropped up.
Portfolio managers dont feel any better about the market than they did three months ago, according to a survey compiled by the International Association of Credit Portfolio Managers.
In July, the met coal producer, looking to delever, revealed plans to suspend its dividend and cut costs. Now, it may be considering a debt restructuring, according to reports.
The final rule, which mandates a 32% reduction in carbon emissions by 2030, will lessen the reliance on coal as an energy source. While it could be litigated, it adds to selling pressure on companies already struggling with heavy debt and low prices.
The debt load for corporate borrowers is exceeding earnings and leverage is nearing all-time high levels, according to Michael Contopoulos, high yield credit strategist at BAML.
Fourth quarter 2014 ended with more upgrades for U.S. speculative grade companies than downgrades, S&P says.
Retail investors are fleeing high yield bonds funds at a record pace of $7.1 billion this week, forcing fund managers to tap their cash reserves and sell some of their most liquid holdings to fund redemptions, even if they feel that the correction is a technical one.
Community banks have seized on a chance to book more loans as larger institutions tap the brakes. Large banks, who generally dominate the leveraged loan space, face increased regulatory scrutiny and are slower to back deals that may include high leverage. Smaller banks, as a result, are reporting better loan-to-deposit ratios that, along with stable net interest margins, are lifting earnings.
As banks look to find new sources of revenue, more and more of them are ramping up in asset-based lending.