CLO Fee Bonanza Is Luring New Players Even as Market Cools (1)

It’s not the most obvious time to jump into the $670 billion collateralized loan obligation market.

Average loan prices are sitting below the peaks of recent years. Returns on the riskiest part of the corporate loans packaged into bonds have been lackluster. And Wall Street analysts have slashed their forecasts for CLO issuance this year.

Even so, money managers have been plunging into the market for the first time, or returning after a long hiatus, including a deal this week. Western Asset Management Co. and AllianceBernstein Holding LP are preparing to get in on the action.

The new faces ...