Strong CLO demand continues to push secondary loan market prices higher. The European CLO market was busy in July, with issuance jumping to EUR 5.42bn, taking year-to-date volume to EUR 20.14bn. At this juncture, the CLO market is comfortably ahead of the EUR 17.8bn recorded at the same point last year and is on course for a post-credit crisis record year.

The strong demand from CLOs buoyed the secondary loan market, which has moved higher in recent months, with the average bid up over 150bps this year to 98.47. Further emphasizing the highly valued nature of the secondary market is that the par-plus share has climbed to 43% of the market, up from only 2% at the start of the year and 13% at the end of 1Q19.

Also contributing to the higher secondary market prices is that new loan supply has struggled to keep up with demand. Year-to-date institutional loan issuance excluding repricingsand refinancingsis down 21% from the same period last year, while M&A related loan volume is off 34%. However, some good news is that loan supply in the last two months has picked up from prior month levels.

-Colm(CJ) Doherty colm.doherty@acuris.com

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Colm (C.J.) Doherty Global Head of Primary Market Analysis Debtwire

Colm Doherty is Debtwire’s Global Head of Primary Market Analysis. He is responsible for leading the production of primary market analysis and reports focused on the leveraged loan and high yield bond markets. Prior to joining Debtwire, Colm was Director of Analysis at Thomson Reuters LPC covering leveraged loans, CLOs and high yield bonds.

Colm has a B.A. in Economics & Legal Science from National University of Ireland Galway and an MSc. in Accounting & Finance from Ulster University.