2021 Outlook – With collateral still weakened, CLOs will incorporate flexibility for managing assets under stress
US speculative-grade default rates (actual and forecast)
Podcast - Outlooks Connections Episode 3
Lower-rated leveraged loans, junior CLO tranches to bear brunt of coronavirus impact
Christina Padgett and Sandra Veseli of the Corporates team, Al Remeza of the Structured Finance team, and Ana Arsov of the Financial Institutions team discuss the outlook for leveraged finance and collateralized loan obligations (CLOs) in the US and EMEA. Coronavirus-related defaults will likely peak in 2021, but banks’ exposure is limited. Lower-rated loans to coronavirus-exposed sectors will be worst affected, with a knock-on effect on the junior tranches of existing CLOs.
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