Octus, a credit intelligence and data provider for buy-side firms, investment banks, law firms and advisory firms, released its recap of the collateralized loan obligation (CLO) market for the first half of 2025. The company also introduced its CLO League Tables with rankings data of top participants across the U.S. and European markets.
“The first half of 2025 presented a complex and dynamic landscape for the CLO market, highlighted by significant volatility, evolving policy shifts and strategic global reallocations,” Hugh Minch, managing editor, CLO insights at Octus, said. “Our in-depth analysis provides critical clarity amidst these challenges, and with the launch of the Octus CLO League Tables, we are excited to deliver an unprecedented level of insight into manager and arranger activity, empowering our clients to make even more informed decisions.”
Key Trends and Developments from H1/25
- Market volatility sparked by tariff announcements: The U.S. tariff announcement in April led to a sharp selloff in the leveraged loan market, with transportation, home furnishings and automotive sectors experiencing the largest average loan price declines in the U.S. CLO liabilities widened sharply but retraced most of their losses following the tariff pause, with the volatility ultimately presenting buying opportunities as spreads reset at more attractive levels.
- Global reallocation and European momentum:S. investors are actively reallocating capital into European CLOs, particularly into equity and mezzanine tranches. This shift is driven by relative value, wider liability spreads, higher modeled equity returns and perceived macro stability, all contributing to expectations of strong issuance volumes through early July.
- Divergence in fundamentals and pricing: Despite modest improvements in interest coverage ratios, CLO portfolio revenue growth declined to 4.74% in Q1/25 U.S. from 6% in Q4/24, and net leverage slightly increased in the first quarter of 2025. This divergence highlights the increasing importance of manager quality and defensive positioning as idiosyncratic risk rises across sectors.
- Surging insurance demand amid regulatory uncertainty: Insurers significantly increased CLO allocations by $14 billion in the past year, with CLOs now comprising over 6% of life insurers’ balance sheets. This strong demand, particularly for AAA and AA-rated tranches, is driven by capital efficiency and low duration risk. However, proposed NAIC changes could reshape CLO tranche allocations, potentially pushing investors higher up the capital stack.
Octus Enahnces CLO Coverage with Global Team Expansion and New CLO Rankings
“Consistent with the company’s strategy to cover all segments of the global credit market, Octus’ dedicated CLO coverage team is now global with eight editorial members based in London and New York. This further highlights the company’s expertise in a very attractive segment of the credit market,” Adelene Lee, executive editor, global credit initiatives at Octus, said.
This expansion underpins the launch of the company’s CLO League Tables. These rankings provide insights into manager performance across both the U.S. and European markets, including:
- Top Global CLO Managers (U.S. and Europe): Blackstone ($58.88bn), Apollo [Redding Ridge] ($52.32bn), Carlyle ($48.64bn), Golub ($42bn), BlackRock ($40.71bn)
- Top CLO Arranging Banks (Global): Bank of America ($38.41bn), Citi ($26.72bn), BNP Paribas ($25.1bn), JPMorgan ($24.13bn), Morgan Stanley ($21.78bn)
- Top U.S. BSL CLO Managers: Blackstone ($39.17bn), Carlyle ($36.55bn), Apollo [Redding Ridge] ($31.59bn), UBS Asset Management ($30.33bn), CIFC Asset Management ($29.86bn)
- Top U.S. Private Credit CLO Managers: Golub ($29.16bn), Antares ($13.28bn), Apollo [Redding Ridge] ($7.76bn), AllianceBernstein ($7.67bn), BlackRock ($7.51bn)
- Top European CLO Managers: CVC (€13.46bn), Blackstone (€11.6bn), Apollo [Redding Ridge] (€11bn), KKR (€10.11bn), BlackRock (€9.93bn)
- Top U.S. BSL CLO Arranging Banks: Bank of America ($32.02bn), Citi ($18.99bn), JPMorgan ($14.93bn), Wells Fargo ($14.32bn), Morgan Stanley ($13.61bn)
- Top U.S. Private Credit CLO Arranging Banks: Wells Fargo ($5.97bn), BNP Paribas ($5.34bn), Societe Generale ($4.06bn), Deutsche Bank ($3.71bn), Natixis ($2.89bn)
- Top European CLO Arranging Banks: Jefferies (€7.67bn), BNP Paribas (€7.15bn), JPMorgan (€6.31bn), Bank of America (€5.14bn), Morgan Stanley (€4.94bn)
“The introduction of our CLO League Tables is a game-changer for the industry,” Darren Maharaj, vice president of data strategy and development at Octus, said. “By providing transparent, data-driven rankings, we are equipping investors with a powerful tool to assess manager quality and strategies, which is more critical than ever given the nuanced market conditions.”
Looking Forward to a Busy Q3/25, Especially in the Insurance Sector
CLO managers anticipate a busy Q3/25, particularly in Europe, ahead of potential tariff reimplementation. Octus emphasizes that defensive credit selection, active portfolio management and structural discipline will remain top priorities for navigating the evolving landscape. CLOs continue to be an essential component in insurance portfolios, offering attractive yield, capital efficiency and structural protection.
