Bloomberg Law
Aug. 8, 2022, 12:35 PM

BofA Expects Share of CCC Loans in CLO Portfolios to Increase

Carmen Arroyo

BofA Securities expects the CCC share of leveraged loans in collateralized loan obligation portfolios to increase by 0.5% to 0.7% in August as a result of a pick up in downgrades.

  • In July, the pace of CCC downgrades in CLOs went up, reversing an 18-month trend of a stable or declining CCC concentration, wrote BofA analysts led by Pratik Gupta in their weekly note
    • Debt issuers including Avaya, Bausch Health Cos. and Weber-Stephen Products LLC were downgraded by S&P Global Ratings
    • The downgrades were driven by “expected weaker operating performance, inflation and supply chain pressure, rising material and labor ...