SFA Research Corner: Confidence in CLOs Boosted by 2020 Resiliency and 2021 Economic Recovery
Provided by Structured Finance Association
Stronger than expected first quarter activity and a pickup in vaccine distribution have resulted in more optimistic outlooks. Based on a stronger and sustained economic recovery, S&P Global Ratings has lowered its projected S&P/LSTA Leveraged Loan Index issuer default rate to 2.75%, which bodes well for CLOs performance in 2021. Moreover, “[t]he resilience of CLOs through the 2020 downturn has bolstered confidence in the asset class,” explains Steve Andergerg Managing Director and CLO Sector Lead at S&P Global Ratings.