Global CLO Market 2026 H1 Update: Lower projections, choosier buyers despite ETFs and regulation

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Global CLO Market 2026 H1 Update: Lower projections, choosier buyers despite ETFs and regulation

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Time for floating rate but no loans

Total CLO supply lower than expected — 2026YTD new issue US BSL CLO supply stands at $64bn, which is

down 28% YoY (lower run-rate than $190bn 2025YE forecast). In Europe, new issue CLO supply stands at

€33bn (flat YoY) and is running at a similar rate to our €70bn forecast from 2025-end.

Strong restructuring activity keeps up gross supply — Refi activity has been strong in US. 2026YTD reset

and refi US BSL CLO supply stands at $81bn (down 3% YoY) and $65bn (up 29% YoY) respectively. 2026YTD

European reset and refi CLO supply stands at €24bn (up 16% YoY) and €8.2bn (vs.€1.2bn YoY), respectively.

Supply forecast — We revise our US BSL CLO FY new issue forecast to $150bn. We revise our refi/reset

forecast to $270bn ($150bn reset and $120bn refi). We maintain our EUR CLO new issue forecast of €70bn

and revise our refi/reset forecast from €40bn to €55bn total (€40bn reset and €15bn refi).

M&A supply revival but smaller universe — As of June, YTD M&A and LBO-related issuance has risen 13%

but total loan supply is down 5% due to lower recap and refi (down 34% and 14% YoY, respectively).

Rate outlook should help loan and ETF investors (and CLO supply) — Loan inflows are not meaningful in

view of macro and rates backdrop, in our view. ETF inflows are positive with history showing that they are a

marginal but important buyer whose inflows have coincided with 1-2bps tightening per $1bn inflow.

Software fears remain but CLOs show value of management — Average pool exposures did not drop

significantly, but there was some name rotation by managers. Some managers with higher software buckets