European mid-market CLOs just a securitisation away – Mid-Market Chatter

02 July 2018
The European mid-market is on track to opening up to CLOs, according to sources familiar with the sector. The asset class has long been thought of as too illiquid in Europe to support the CLO vehicle, but growing diversity in direct lender portfolios combined with a tightening on spreads in the broadly syndicated loans (BSL) markets is making a middle market CLO a more appealing option.
Investors who have looked to the US mid-market CLOs for the risk premium are pushing for European CLOs to be raised to reap the same pricing benefit, said a lender familiar with the market.
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