How the European CLO market has developed over 180 Days of COVID-19

In May, we published “How COVID-19 Changed The European CLO Market In 60 Days,” which discussed how the first two months of COVID-19 had altered the market for European collateralized loan obligations (CLOs). Following six months of heightened rating actions on nonfinancial corporates spurred by the economic fallout from the pandemic, data for CLOs show how the market has continued to evolve.

New CLOs have priced during this period, but at a slower pace and at lower levels compared from those in 2019. The focus is on monitoring the performance of loans underlying existing transactions, as well as challenges that existed before and persisted during COVID-19, including high leverage ratios, EBITDA add-backs, and covenant-lite loans.

Volta Finance Limited (LON:VTA) is a closed-ended limited liability company registered in Guernsey. Volta’s investment objectives are to seek to preserve capital across the credit cycle and to provide a stable stream of income to its Shareholders through dividends that it expects to distribute on a quarterly basis.

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