Structured Finance partner Sean M. Solis, who was profiled in Insider’s article “Meet 12 Bankers, Investors, and Lawyers Helping Engineer the Next Big Boom in the $1 Trillion World of CLOs” as one of the industry’s pre-eminent leaders, spoke on the rise of CLO issuances and what drew him to the industry. He also commented on trends in the wake of the pandemic’s market disruption for Insider’s article “Top CLO Players are Staffing Up and Fees are Getting Squeezed as a Wave of New Investors Pile In.”
In 2020, the COVID-19 pandemic led to downgraded loan ratings that temporarily impacted CLO portfolios. Despite this, the market remained resilient and some CLO managers produced remarkable returns for investors, leading to notably heightened demand in the asset class. In the first half of 2021, which is shaping up to be a banner year for CLOs, Milbank worked on $57 billion in issuances, making it one of the “top two in the industry by a wide margin.” Earlier this year, Milbank was ranked as the #1 Global CLO Manager counsel in Creditflux’s Q1 2021 CLO law firm league table rankings, and the firm was also ranked as the #1 CLO Manager counsel in the US and the #2 CLO Manager counsel in the EU.
Mr. Solis, who is the firm’s lead Structured Credit partner and “one of the top CLO experts in the legal community,” commented that 2020 was an “eye-opening experience for money managers and other fund investors.” He noted, "That's always been the biggest bottleneck for getting deals done: where is the equity going to come from? The managers who really outperformed last year have seen a significant increase in demand, which makes it infinitely easier to print deals."
It was the complexity of these deals, as well as the constant evolution of the CLO market, that attracted Mr. Solis to the industry initially. "It's a huge jigsaw puzzle," he said.
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