Deep in the CLO Machine, One Manager Sees a Warning Light
- Warehouse providers ‘not as receptive’, says Aegon’s Schaeffer
- Next default wave could hit loans more than bonds: UBS
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Jim Schaeffer has found a glitch in his supply chain -- and reckons it could be an early warning sign that demand in the red-hot leveraged loan market is set to cool.
The deputy chief investment officer at Aegon Asset Management was collecting loans to create his firm’s next collateralized loan obligation. These are typically stored with a third party, which holds them on its books until there’s enough to bundle into a transaction. Yet when Schaeffer called on his usual warehouse providers, they were not keen to take on more exposure.