When it comes to the loan market, two things are undisputed.
The first is that ever since a US court vacated long-standing Dodd-Frank risk-retention rules last April, which forced managers to hold part of the securities they sell to investors, a flood of new loan issuance was unleashed to meet unprecedented CLO demand for leveraged loans. The result was a record year for CLO issuance…The second undisputed aspect of the loan and CLO market, is that Japanese banks have become some of the most aggressive buyers of CLOs, with UBS and the Bank of England estimating that these bank have been buying between 50-75% of AAA-rated CLO tranches and a third of the total market.
https://www.zerohedge.com/news/2019-01-14/unexpected-development-could-crush-leveraged-loan-market
