The Loan Market Association held its inaugural conference in London on October 16. It was packed meeting of market participants looked for reasons to be optimistic amidst the gloom. The programme featured panel discussions designed to shine some light in the darkness: how to revitalize the primary market; where the liquidity safe havens are; how to invest in distressed debt.
The great and the good of the European loan market were there to bolster confidence and show how the market can move on. Even the panel on CLOs was reasonably upbeat – pointing out that investors are still there for the right structure. Perhaps buoyed up by this glimmer of optimism, the panel decided to poll the audience – an audience of loan market experts – as to whether they would rather see their pension fund invested in
(a) LevX Series 3 (five year) at 1,200 basis points,
(b) a triple-A CLO (five years) at 400bp or
(c) neither.
The result was rather illuminating:
14% for (a), 16% for (b) and a whopping 69% for (c).
When not even its protagonists want to touch it with a bargepole there still seems to be some way to go in restoring confidence to the loan market.