CLOs Attract Domestic, Foreign Banks, Pushing Up Loan Prices

Banks from Wells Fargo & Co. to smaller Japanese lenders are flocking to top-rated collateralized loan obligation deals, pushing up secondary prices for buyout debt.

JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo have been buying AAA rated CLO securities in bulk, three years after a market-wide pull back from such securities. The $1.3 trillion CLO market has welcomed renewed appetite from other buyers, such as Japanese firms JA Bank Osaka and Rakuten Bank, which are both deploying capital into CLO deals.