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CLO Market Pain Is Magnified by Nochu’s Exit, UK Pensions Blowup

Oct. 21, 2022, 3:17 PM

As UK pensions dumped assets in recent weeks, CVC Credit made an unusual choice: it kicked off a sale of bonds backed by a portfolio of leveraged loans. It had Japan’s Norinchukin Bank on board to buy most of the collateralized loan obligation.

Then it hit a snag. Norinchukin Bank, also known as Nochu, suddenly bowed out as it broadly stepped back from the market, according to people with knowledge of the deal. Withdrawing from a deal midway through just about never happens in the $1 trillion CLO market, because a buyer that reneges on a deal risks getting cut ...