Milbank Partner Sean M. Solis Quoted in Asset Securitization Report on 2018 End-of-Year Loan Selloff

Milbank Structured Finance partner Sean M. Solis was quoted in a recent Asset Securitization Report article titled “How CLO Managers Profited from December Loan Selloff.” The article discusses how some CLO managers took advantage of a 2018 end-of-year loan selloff by issuing last minute collaterized loan obligations in December. The practice of issuing CLO notes and using the proceeds to quickly and inexpensively acquire collateral in the secondary market, known as “printing and sprinting,” is in contrast to the typical issuance process which spans a few months. According to Refinitiv (formerly the Financial and Risk business of Thomson Reuters), this helped push new issuance of open-market CLOs to a record $128.1 billion for 2018 as a whole.

According to Mr. Solis, “print and sprint was a hot idea.” He noted, “A lot of managers were trying to get it done…but the loan market has rallied and made the print and sprint difficult to pull off.” At the rebounded price trends, “The equity returns are just a lot less optimal.”