Eleventh-hour reprieve as boom-era CLOs turn static

The elephant in the room for any discussion about the revival of European loans in general and European CLOs in particular is the number of existing vehicles due to reach the end of their reinvestment periods this year. Such deals – most of which were inked in the boom years of 2005 to 2007 – will no longer be able to buy and sell assets; as such they become static. Roughly two-thirds of all CLOs in the market will become static this year, holding between €75 billion and €100 billion of assets between them. This at the same time as around €90 billion of European leveraged loans are due to mature between 2013 and 2015, according to Fitch.