US CLO new-issue volume fell to its lowest quarterly level since Q3 2023, with $30.2 billion priced across 65 deals in the second quarter, as macro risks and tight arbitrage conditions weighed on the market. Year-to-date issuance of $77.2 billion is about 23% behind last year's $99.8 billion pace, and only 88 unique managers have priced deals at the midpoint of 2026 versus 107 a year ago. The slowdown was driven by a software selloff in leveraged loans and volatility from the Iran conflict, which pushed energy prices higher and injected fresh macro uncertainty into credit. Issuance troughed at $6.2 billion in April before rebounding to $16.8 billion in May, and most sell-side forecasts still project full-year volume in a $190-220 billion range, though JPMorgan is the key bear at $140-150 billion and Morgan Stanley trimmed its estimate to $180 billion. Analysts at Deutsche Bank expect new-issue pricings to be constructive in the second half, with spreads rangebound and investor concerns over macro and geopolitical risks likely to decrease.
Morgan StanleyMorgan Stanley trimmed its CLO issuance estimate to $180 billion, indicating a cautious outlook.
Deutsche Bank Aktiengesellschaft
JPMorgan Chase & CoJPMorgan is the key bear with a $140-150 billion CLO issuance forecast, reflecting a negative view on the market.