U.S. new issue CLO volume outpaces refinancings for first time in 2017

May marked the first month this year where U.S. new issue CLO volume outpaced refinancing volume. CLO new issue amounted to $9.8 billion in May, slightly down from the $10.2 billion posted in April, taking 2017 issuance to $37.5 billion. In comparison, refinancing and reset activity dropped in May with refinancings adding $5.1 billion and resets $3.4 billion. Combined year to date refinancing and reset volume through May stands at over $80 billion. Going forward, expectations for the second half of the year are that U.S. CLO refinancing activity will slow down while reset volume will pick up, according to a recent Thomson Reuters LPC CLO survey. The same survey indicates that half of respondents expect full year 2017 new issue CLO volume to exceed $70 billion. In Europe, six new issue CLOs totaling €2.4 billion priced in May, taking year to date volume to €6.7 billion. On the other hand, reset volume decreased to two deals worth €1 billion while refinancings were higher with four deals totaling €1.4 billion. This took 2017 refinancing volume to €5 billion and resets to €6 billion.