European CLO Weekly: Mixed outlook for CLO equity

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European CLO Weekly: Mixed outlook for CLO equity

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European CLO Weekly

Mixed outlook for CLO equity

Market update: More loan repricings, strong BWIC supply 22 June 2026

On the CLO primary, 2 new issue deals & 2 resets priced last week. YTD gross new Structured Finance

issuance is inching closer towards €28bn. Europe

CLO

Meanwhile, on the loan primary, activity surged, but was heavily skewed towards

repricings, refis, and A&Es. At least 10 leveraged loans got repriced last week,

accounting for almost €8bn of volume.

On the secondary, CLO BWIC vol increased to €550mn, with very strong triple-A supply.

Spreads generally held firm except for single-Bs, which finished the week a bit softer.

CLO equity cash distributions – back to 2023 levels?

Dustin Walpert, CFA

The median in-RP deal has paid 6.6% CoC during the first half of the year. Going European CLO Strategist

forward, heavy loan repricing over the last few weeks will likely weigh on distributions. MLI (UK)

+44 20 7996 0982

However, there are also some redeeming factors, including slightly higher base rates vs. dustin.walpert@bofa.com

start of the year, which tends to be conducive to equity distributions. For our base case, Alexander Batchvarov, CFA

we expect cash distributions to remain at similar levels in H2, which would imply around Int'l Str. Fin. Strategist BofA Europe (Zurich)

13% CoC for FY 2026. This would be in line with 2023 and significantly below 2024 and +41 44 297 7469

2025 (when annual CoC was in the 19-20% for average in-RP deals). alexander.batchvarov@bofa.com

Pressure on WAS Test

Common Acronyms (see Appendix)

Around 2% of in-RP CLOs are breaching their WAS Test given €67bn of loan repricings

YTD. Furthermore, 38% of deals have low WAS Test cushions between 0-5 bps. Some