US CLO Weekly: Loans – bifurcated in three ways

Research evidence excerpt

US CLO Weekly: Loans – bifurcated in three ways

US CLO WKLY – MAY 18, 2026

US CLO Issuance Forecast ($B)

2026 forecast

$190B NI / $170B Resets 2024 2025 2026 Forecast YoY (est)

BSL $163 $166 $145 -13%

After reaching the second consecutive $200B+ year MM $39 $43 $45 5%

($209B), 2026 new issue volume looks set to marginally Total $202 $209 $190 -9%

contract to $190B.

Refi $84 $105 $75 -29%

Although strong market fundamentals should persist Reset $223 $232 $170 -27%

over the next 12 months – such as relatively high all-in

Total $307 $337 $245 -27% base rates, continued annuity and ETF inflows, and

constructive corporate balance sheets – the CLO

market will contend with late-cycle macro conditions

Upside risks to issuance forecast include:

and persistent uncertainty stemming from policy and

technological disruption, presenting a headwind. • LBO / M&A activity accelerates even more than anticipated

in 2026 due to greater macroeconomic certainty

Although the fiscal stimulus attached to the OBBB will

• Trade and fiscal policy uncertainty is mitigated, producing be supportive for consumers and corporations leading

up to the mid-term elections, their effects will be a pro-growth, pro-credit environment

transitory. The stimulus, combined with a still-tight • CLO ETF inflows north of $12B in 2026, serving as a CLO

labor market, may lead to an elevated inflation rate well NI demand driver, driven in part by an elevated base rate

above 2% throughout much of 2026, forcing the FOMC

into a challenging and uncertain rate-setting position Downside risks to issuance forecast include:

heading into 2027.

• Dual-sided risks of a slowing labor market and persistently

Although some industry sectors that play an outsized high inflation, exacerbated by USD weakening, putting