CLO Monthly Monitor
CLO performance was mixed in March as carry drove positive total return for higher-quality liabilities, but spreads widened across all tranches in the capital stack.
CLO Monthly Monitor
CLO performance was mixed in March as carry drove positive total return for higher-quality liabilities, but spreads widened across all tranches in the capital stack.
Contents
While the majority of fixed income is off to a positive start in 2025, we believe CLO debt has the potential to continue to outperform similarly rated debt as it did in 2024. CLO performance across ratings has been strong given the yield and additional carry. Strong technical dynamics within the CLO asset class, characterized by limited net new issuance and steady performance from the underlying collateral pools, are expected to support prices remaining near or above par throughout the capital stack.
CLO tranches delivered mixed total returns in March, with the JP Morgan CLOIE Index reporting returns of 0.17% (AAA), 0.12% (AA), 0.17% (A), -0.27% (BBB), and -1.45% (BB).
New CLO origination was $18.8 billion across 39 deals, capping off a first quarter that saw $56.1 billion in new issuance in spite of market volatility that surfaced at the end of March.
While the majority of fixed income is off to a positive start in 2025, we believe CLO debt has the potential to continue to outperform similarly rated debt as it did in 2024. CLO performance across ratings has been strong given the yield and additional carry. Strong technical dynamics within the CLO asset class, characterized by limited net new issuance and steady performance from the underlying collateral pools, are expected to support prices remaining near or above par throughout the capital stack.
CLO tranches delivered mixed total returns in March, with the JP Morgan CLOIE Index reporting returns of 0.17% (AAA), 0.12% (AA), 0.17% (A), -0.27% (BBB), and -1.45% (BB).
New CLO origination was $18.8 billion across 39 deals, capping off a first quarter that saw $56.1 billion in new issuance in spite of market volatility that surfaced at the end of March.