New issuance of collateralised loan obligations (“CLOs”) rose last year to its highest level since the credit crunch. 2013 saw U.S. CLO issuance rise to about US$81 billion, from US$54 billion the year before while European CLO issuance leapt to about €8 billion from zero during the same period.

Market participants expect this momentum to carry on into 2014. Headwinds including competition from the high-yield market and direct-lending funds, as well as on-going adjustment to regulatory hurdles, are expected to be balanced by a continuation of reasonable economics, with new issuance predicted to reach a similar level to the previous year.